<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 3, 1999
DEFINITIVE INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE
SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
/ / Preliminary Information Statement
/ / Confidential, For Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
/X/ Definitive Information Statement
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required.
/X/ Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock, par value $0.01 per share ("Common Stock"), of Cellular
Communications International, Inc.
(2) Aggregate number of securities to which transaction applies:
9,720,361 shares of Common Stock. Such number assumes the issuance prior
to the consummation of the Merger (as defined herein) of 3,929,940
shares of Common Stock upon the exercise of outstanding options and
other rights and securities exercisable into shares of Common Stock.
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): $80 per share
of Common Stock.
(4) Proposed maximum aggregate value of the transaction:
Estimated solely for purposes of this filing, the proposed maximum
aggregate value of the transaction is $777,628,880.
(5) Total fee paid:
$155,525.78*
* The filing fee calculation assumes the purchase of 9,720,361 shares of
Common Stock at a price of $80 per Share in cash, without interest.
The amount of the filing fee calculated in accordance with Regulation
240.0-11 of the Securities Exchange Act of 1934, as amended, equals
1/50th of one percent of the value of the transaction. The filing fee
with respect to the securities to which this transaction applies is
offset in its entirety by the amount previously paid pursuant to the
December 17, 1998 Schedule 14D-1 filing.
/X/ Fee paid previously with preliminary materials.
/X/ Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
$286,665.61.
(2) Form, Schedule or Registration Statement No.:
Schedule 14D-1.
(3) Filing Party:
Olivetti S.p.A., Mannesmann AG and Kensington Acquisition Sub, Inc.
(4) Date Filed:
December 17, 1998.
<PAGE>
[LOGO]
March 3, 1999
Dear Stockholder:
You are cordially invited to attend a Special Meeting of the Stockholders
(the "Special Meeting") of Cellular Communications International, Inc. (the
"Company") to be held on Wednesday, March 24, 1999, at 9:00 a.m., local time, at
Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, 47(th) Floor, New
York, New York 10022. As described in the enclosed Information Statement, the
Special Meeting will be held for the purpose of approving and adopting an
Agreement and Plan of Merger, dated as of December 11, 1998 (the "Merger
Agreement"), by and between Kensington Acquisition Sub, Inc., a Delaware
corporation ("Purchaser"), and the Company, providing for, among other things,
the merger of Purchaser with and into the Company (the "Merger").
As you know, the Merger is the second and final step in the acquisition of
the Company by Olivetti S.p.A. and Mannesmann AG. The first step was a tender
offer (the "Offer") pursuant to which Purchaser acquired 12,079,305 shares
(including shares required to be delivered in accordance with guaranteed
delivery procedures) of common stock, par value $.01 per share ("Common Stock")
(representing approximately 55.4% of the Common Stock on a fully diluted basis
or 67.6% of the outstanding Common Stock) for $80 per share in cash. Upon
consummation of the Merger, each share of Common Stock will be converted into
the right to receive $80 per share in cash.
The Company's Board of Directors has approved the Merger Agreement and the
transactions contemplated thereby, determined that the Offer and the Merger are
fair to, and in the best interests of, the stockholders of the Company and has
recommended that the stockholders of the Company vote their shares "for"
approval and adoption of the Merger Agreement and the transactions contemplated
thereby.
As a result of completion of the Offer, Purchaser owns and has the right to
vote at the Special Meeting sufficient shares to approve the Merger Agreement
without the affirmative vote of any other stockholder, thereby assuring the
approval of the Merger Agreement. If the Merger is consummated, holders of
shares of Common Stock who do not vote in favor of approval and adoption of the
Merger Agreement and who otherwise comply with the requirements of Section 262
of the Delaware General Corporation Law will be entitled to receive such
consideration as may be determined to be due under such provisions.
The accompanying Information Statement explains in detail the terms of the
Merger. Although you are not being asked for a proxy and are requested not to
send a proxy, please read the Information Statement carefully. As soon as
practicable after the effectiveness of the Merger, we will send you instructions
for surrendering your certificates for Common Stock and a letter of transmittal
to be used for this purpose. You should not submit your stock certificates for
exchange until you have received the instructions and the letter of transmittal.
Very truly yours,
[SIGNATURE]
Marco De Benedetti
[SIGNATURE]
Dr. Kurt J. Kinzius
Co-Chairmen of the Board of Directors
Cellular Communications International,
Inc.
<PAGE>
[LOGO]
NOTICE OF SPECIAL MEETING OF THE STOCKHOLDERS
To the Stockholders:
A Special Meeting of Stockholders (the "Special Meeting") of Cellular
Communications International, Inc., a Delaware corporation (the "Company"), will
be held on Wednesday, March 24, 1999, at 9:00 a.m., local time, at Skadden,
Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, 47(th) Floor, New York, New
York 10022, for the following purposes:
1. To consider and vote upon a proposal to approve and adopt an
Agreement and Plan of Merger, dated as of December 11, 1998 (the "Merger
Agreement"), by and between Kensington Acquisition Sub, Inc. ("Purchaser")
and the Company. A copy of the Merger Agreement is attached to the
Information Statement as Exhibit A. As more fully described in the
Information Statement, the Merger Agreement provides that (i) Purchaser will
be merged with and into the Company (the "Merger") and the Company will be
the surviving corporation, and (ii) each issued and outstanding share of
Common Stock, par value $.01 per share ("Common Stock"), including the
associated preferred stock purchase rights issued pursuant to the Rights
Agreement, dated as of December 19, 1990, by and between the Company and
Continental Stock Transfer and Trust Company, as rights agent (the "Rights"
and, together with the Common Stock, "Shares"), of the Company (other than
Shares owned by Purchaser or any subsidiary of Purchaser, held by the
Company as treasury stock, or held by stockholders, if any, of the Company
who properly perfect appraisal rights under the Delaware General Corporation
Law (the "DGCL")), will be converted, upon the consummation of the Merger,
into the right to receive $80 per Share, net to the seller in cash without
interest thereon.
2. To transact such other business as may properly come before the
Special Meeting or any adjournments or postponements thereof.
The Board of Directors of the Company has fixed the close of business on
March 1, 1999 as the record date (the "Record Date") for the determination of
the Company's stockholders entitled to notice of and to vote at the Special
Meeting. Only holders of Shares of record at the close of business on the Record
Date will be entitled to notice of and to vote at the Special Meeting or any
adjournments or postponements thereof.
If the Merger is consummated, holders of Shares who do not vote in favor of
approval and adoption of the Merger Agreement and who otherwise comply with the
requirements of Section 262 of the DGCL will be entitled to receive such
consideration as may be determined to be due under such provisions. See Exhibit
D to the Information Statement for the text of Section 262 of the DGCL and "The
Merger-- Certain Legal Matters; Regulatory Approvals--Appraisal Rights" in the
Information Statement for a description of the procedures to be followed to
exercise such rights.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING.
By Order of the Board of Directors,
[SIGNATURE]
Marco De Benedetti
[SIGNATURE]
Dr. Kurt J. Kinzius
Co-Chairmen of the Board of Directors
Cellular Communications International,
Inc.
March 3, 1999
New York, New York
<PAGE>
[LOGO]
INFORMATION STATEMENT
Special Meeting of Stockholders
To Be Held March 24, 1999
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
This Information Statement ("Information Statement") is furnished to the
holders of shares of common stock, par value $.01 per share ("Common Stock"),
including the associated preferred stock purchase rights issued pursuant to the
Rights Agreement, dated as of December 19, 1990, by and between the Company and
Continental Stock Transfer and Trust Company (the "Rights" and, together with
the Common Stock, "Shares"), of Cellular Communications International, Inc., a
Delaware corporation (the "Company") (the holders of record of Shares being
hereinafter referred to as the "Stockholders"), in connection with the Special
Meeting of Stockholders to be held on Wednesday, March 24, 1999, at 9:00 a.m.,
local time, at Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue,
47(th) Floor, New York, New York 10022, and at any adjournments or postponements
thereof (the "Special Meeting"). The Board of Directors of the Company (the
"Board of Directors") has fixed the close of business on March 1, 1999 as the
record date (the "Record Date") for determining the Stockholders entitled to
notice of and to vote at the Special Meeting. At the Special Meeting, the
Stockholders will consider and vote upon a proposal to approve and adopt an
Agreement and Plan of Merger, dated as of December 11, 1998 (the "Merger
Agreement"), by and between Kensington Acquisition Sub, Inc., a Delaware
corporation ("Purchaser"), and the Company, providing for, among other things,
the merger of Purchaser with and into the Company (the "Merger"). Immediately
following the Merger, the Company will continue as the surviving corporation
(the "Surviving Corporation"). A copy of the Merger Agreement is attached to
this Information Statement as Exhibit A. If the Merger Agreement is approved and
the Merger is consummated, each outstanding Share (other than Shares owned by
Purchaser or any subsidiary of Purchaser, held by the Company as treasury stock,
or held by Stockholders, if any, who properly perfect appraisal rights under the
Delaware General Corporation Law (the "DGCL")) will be converted into the right
to receive $80 per Share in cash without interest thereon. As a result of
completion of a tender offer (the "Offer") pursuant to which Purchaser acquired
12,079,305 Shares (including Shares required to be delivered in accordance with
guaranteed delivery procedures), Purchaser owns and has the right to vote at the
Special Meeting sufficient Shares to approve the Merger Agreement without the
affirmative vote of any other Stockholder, thereby assuring the approval of the
Merger Agreement.
The Board of Directors has approved the Merger Agreement and the
transactions contemplated thereby, has determined that the Offer and the Merger
are fair to, and in the best interests of, the Stockholders and has recommended
that the Stockholders vote their Shares "for" approval and adoption of the
Merger Agreement and the transactions contemplated thereby.
IF THE MERGER IS CONSUMMATED, HOLDERS OF SHARES WHO DO NOT VOTE IN FAVOR OF
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND WHO OTHERWISE COMPLY WITH THE
REQUIREMENTS OF SECTION 262 OF THE DGCL WILL BE ENTITLED TO RECEIVE SUCH
CONSIDERATION AS MAY BE DETERMINED TO BE DUE UNDER SUCH PROVISIONS. SEE EXHIBIT
D TO THIS INFORMATION STATEMENT FOR THE TEXT OF SECTION 262 OF THE DGCL AND "THE
MERGER--CERTAIN LEGAL MATTERS; REGULATORY APPROVALS--APPRAISAL RIGHTS" IN THIS
INFORMATION STATEMENT FOR A DESCRIPTION OF THE PROCEDURES TO BE FOLLOWED TO
EXERCISE SUCH RIGHTS.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS INFORMATION STATEMENT AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THE DELIVERY OF THIS INFORMATION STATEMENT SHALL NOT IMPLY THAT
THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.
This Information Statement and the accompanying Notice of Special Meeting
are first being mailed to Stockholders on or about March 3, 1999.
------------------------
The date of this Information Statement is March 3, 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Special Meeting.................................................................... 1
The Merger............................................................................. 5
The Merger Agreement................................................................... 14
Certain Federal Income Tax Considerations.............................................. 20
Selected Consolidated Financial Information of the Company............................. 21
Price Range of Shares; Dividends....................................................... 23
Security Ownership of Certain Beneficial Owners and Management......................... 24
Other Matters.......................................................................... 26
Additional Information................................................................. 26
Independent Public Accountants......................................................... 26
Incorporation of Certain Documents by Reference........................................ 27
</TABLE>
EXHIBITS
<TABLE>
<S> <C>
Exhibit A Agreement and Plan of Merger.
Exhibit B Stockholders Agreement.
Exhibit C Option Agreement.
Exhibit D Section 262 of the Delaware General Corporation Law.
Exhibit E Opinion of Wasserstein Perella & Co., Inc.
</TABLE>
i
<PAGE>
THE SPECIAL MEETING
This Information Statement is being furnished to the Stockholders in
connection with the Special Meeting to be held at 9:00 a.m., local time, on
Wednesday, March 24, 1999 at Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third
Avenue, 47(th) Floor, New York, New York 10022, and any adjournments or
postponements thereof.
PARTIES TO THE MERGER.
CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Delaware
corporation with its principal executive office located at 110 East 59th Street,
New York, New York 10022. The Company's primary asset is an approximate 14.667%
interest in Omnitel Sistemi Radiocellulari Italiani S.p.A. ("OSR"), a strategic
joint venture which holds a 70% interest in Omnitel Pronto Italia S.p.A.
("Omnitel"). The Company, through its 14.667% interest in OSR, holds an
approximate 10.267% interest in Omnitel. Omnitel is Italy's second leading
mobile operator with over 5.0 million subscribers.
CERTAIN INFORMATION CONCERNING PURCHASER, OLIVETTI AND
MANNESMANN. Purchaser is a newly incorporated Delaware corporation organized
solely to effect the Offer and the Merger and has not carried on any activities
other than in connection with the Offer and the Merger. The principal offices of
Purchaser are c/o Olivetti S.p.A., Via Jervis 77, 10015 Ivrea, Turin, Italy and
c/o Mannesmann AG, Mannesmannufer 2, 40213 Dusseldorf, Germany. Purchaser is
owned as to 50% of its outstanding capital stock by Olivetti S.p.A., a limited
liability company organized under the laws of Italy ("Olivetti"), and as to 50%
of its outstanding capital stock by Mannesmann AG, a limited liability company
organized under the laws of Germany ("Mannesmann"). Except for Purchaser's
purchase of Shares pursuant to the Offer, it is not anticipated that Purchaser
will have any significant assets or liabilities or engage in significant
activities other than those incident to its formation and capitalization and the
transactions contemplated by the Offer and the Merger.
On February 24, 1999, Olivetti and Mannesmann entered into a share purchase
agreement pursuant to which, among other things, Olivetti will sell to
Mannesmann all of Olivetti's shares of capital stock of Purchaser, subject to
the satisfaction of certain conditions. Upon consummation of this transaction,
Mannesmann will own 100% of the capital stock of Purchaser. Pursuant to the
agreement, Olivetti has undertaken to cause its appointed designees to resign
from the Board of Directors as of the closing date of the transactions
contemplated by the agreement.
Mannesmann operates in four sectors: Telecommunications, Engineering,
Automotive and Tubes and Trading and generated sales of around DM 39 billion in
1997. The group is one of the leading alternative telecommunication operators in
the recently liberalized European market. The principal offices of Mannesmann
are located at Mannesmannufer 2, 40213 Dusseldorf, Germany. The telephone number
of Mannesmann at such location is 49 211 820 2427.
The Olivetti Group is a leading international player operating through
subsidiaries and affiliates in the telecommunications and information technology
sectors. In telecommunications, Olivetti operates in both wireless and wireline
markets through Omnitel and the fixed line operator Infostrada S.p.A.,
respectively. In the information technology sector, Olivetti wholly owns
Olivetti Lexikon, which specializes in information technology products for the
office and consumer markets. It also has an 18.5% ownership interest in Wang
Global, a United States publicly traded company. The principal offices of
Olivetti are located at Via Jervis 77, 10015 Ivrea, Turin, Italy. The telephone
number of Olivetti at such location is 39 0125 5200.
MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING.
At the Special Meeting, Stockholders will meet to:
1. Consider and vote upon a proposal to approve and adopt the Merger
Agreement. A copy of the Merger Agreement is attached to this Information
Statement as Exhibit A. As more fully described below, the Merger Agreement
provides that: Purchaser will be merged with and into the Company, the
separate corporate existence of Purchaser will cease with the Company
continuing as the Surviving Corporation, and (ii) each issued and
outstanding Share (other than Shares owned by
<PAGE>
Purchaser or any subsidiary of Purchaser, held by the Company as treasury
stock, or held by Stockholders, if any, who properly perfect appraisal
rights under the DGCL), will be converted, upon the consummation of the
Merger, into the right to receive $80 per Share, net to the seller in cash
without interest thereon (the "Merger Consideration").
2. Transact such other business as may properly come before the Special
Meeting or any adjournments or postponements thereof.
The Board of Directors has approved the Merger Agreement and the
transactions contemplated thereby, has determined that the Offer and the Merger
are fair to, and in the best interests of, the Stockholders and has recommended
that the Stockholders vote their Shares "for" approval and adoption of the
Merger Agreement and the transaction contemplated thereby.
The Merger is the second and final step in the acquisition of the Company by
Olivetti and Mannesmann. The first step was the Offer pursuant to which
Purchaser acquired 12,079,305 Shares (representing approximately 55.4% of the
Shares on a fully diluted basis or 67.6% of the outstanding Shares and including
Shares that are required to be delivered in accordance with guaranteed delivery
procedures) for $80 per Share, net to the seller in cash. As a result of
completion of the Offer, Purchaser owns and has the right to vote at the Special
Meeting sufficient Shares to approve the Merger Agreement without the
affirmative vote of any other Stockholder, thereby assuring the approval of the
Merger Agreement. Upon consummation of the Merger, each Share (other than Shares
owned by Purchaser or any subsidiary of Purchaser, held by the Company as
treasury stock, or held by Stockholders, if any, who properly perfect appraisal
rights under the DGCL) will be converted into the right to receive the Merger
Consideration.
IF THE MERGER IS CONSUMMATED, STOCKHOLDERS WHO DO NOT VOTE IN FAVOR OF
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND WHO OTHERWISE COMPLY WITH THE
REQUIREMENTS OF SECTION 262 OF THE DGCL WILL BE ENTITLED TO RECEIVE SUCH
CONSIDERATION AS MAY BE DETERMINED TO BE DUE UNDER SUCH PROVISIONS. SEE EXHIBIT
D TO THIS INFORMATION STATEMENT FOR THE TEXT OF SECTION 262 OF THE DGCL AND "THE
MERGER--CERTAIN LEGAL MATTERS; REGULATORY APPROVALS--APPRAISAL RIGHTS" BELOW FOR
A DESCRIPTION OF THE PROCEDURES TO BE FOLLOWED TO EXERCISE SUCH RIGHTS.
DATE, PLACE AND TIME.
The Special Meeting will be held at Skadden, Arps, Slate, Meagher & Flom
LLP, 919 Third Avenue, 47(th) Floor, New York, New York 10022, on Wednesday,
March 24, 1999, commencing at 9:00 a.m., local time.
EFFECTIVE TIME OF THE MERGER.
Subject to the provisions of the Merger Agreement, Purchaser and the Company
shall cause the Merger to be consummated by filing with the Secretary of State
of the State of Delaware, as provided in the DGCL, a Certificate of Merger (the
later of the time of such filing or the time specified in the Certificate of
Merger being the "Effective Time"). Assuming all conditions to the Merger are
satisfied or waived prior thereto, it is anticipated that the Effective Time
will occur as soon as practicable after the Special Meeting.
RECORD DATE AND VOTING.
The Board of Directors has fixed the close of business on March 1, 1999 as
the Record Date for the determination of Stockholders entitled to notice of and
to vote at the Special Meeting. Only holders of record at the close of business
on the Record Date will be entitled to vote at the Special Meeting. At the close
of business on the Record Date, there were 17,869,726 Shares outstanding and
entitled to vote at the Special Meeting, held by approximately 167 Stockholders
of record.
2
<PAGE>
Each Share is entitled to one vote. The presence, in person or by proxy, of
the holders of record of a majority of the outstanding Shares will be necessary
to constitute a quorum for the transaction of business at the Special Meeting.
Purchaser intends to have all of its Shares present at the Special Meeting,
which will satisfy the quorum requirements under the DGCL and the Bylaws of the
Company for the Special Meeting. Abstentions (including broker non-votes) also
will be included in the calculation of the number of votes represented at the
Special Meeting for purposes of determining whether a quorum has been achieved.
Stockholders should not forward any Share certificates. If the Merger is
consummated, Share certificates should be delivered in accordance with
instructions set forth in a letter of transmittal, which will be sent to
Stockholders by IBJ Whitehall Bank & Trust Company, in its capacity as the
exchange agent for the Merger (the "Exchange Agent"), as soon as reasonably
practicable after the Effective Time. See "Surrender and Payment for Shares"
below.
VOTE REQUIRED.
The affirmative vote of holders of a majority of the outstanding Shares
entitled to vote at the Special Meeting is required to approve and adopt the
Merger Agreement. Because the required vote is based upon the total number of
outstanding Shares and not the number of Shares voted at the Special Meeting,
the failure by the holder of any such Shares to vote in person at the Special
Meeting or the abstention from voting by any holder of such Shares (including
broker non-votes) will have the same effect as a vote cast "against" the
approval and adoption of the Merger Agreement.
NOTWITHSTANDING THE FOREGOING, AS A RESULT OF THE CONSUMMATION OF THE OFFER,
PURCHASER OWNS SUFFICIENT SHARES TO APPROVE AND ADOPT THE MERGER AGREEMENT
WITHOUT THE VOTE OF ANY OTHER STOCKHOLDER. ACCORDINGLY, THE APPROVAL AND
ADOPTION OF THE MERGER AGREEMENT IS ASSURED.
The obligations of the Company and Purchaser to consummate the Merger are
subject, among other things, to the condition that Stockholders approve and
adopt the Merger Agreement. See "The Merger Agreement--The Merger."
Stockholders are entitled to exercise dissenters' rights under the DGCL as a
result of the Merger. See "Certain Legal Matters; Regulatory
Approvals--Appraisal Rights" and Exhibit D hereto.
SURRENDER AND PAYMENT FOR SHARES.
As soon as reasonably practicable after the consummation of the Merger, the
Exchange Agent will mail to each holder of a certificate, which immediately
prior to such time represented outstanding Shares (the "Certificates"), (i) a
form of letter of transmittal specifying that delivery will be effected, and
risk of loss and title to such Certificate will pass, only upon proper delivery
of such Certificate to the Exchange Agent and (ii) instructions for use in
effecting the surrender of the Certificates for payment therefor. For a
Stockholder validly to surrender Shares pursuant to the Merger, a Certificate
for surrendered Shares, together with a properly completed and duly executed
letter of transmittal and any other required documents, must be received by the
Exchange Agent at one of its addresses set forth on the letter of transmittal or
such Shares must be delivered pursuant to the procedure for book-entry transfer
set forth below. Until surrendered, such Certificates will represent solely the
right to receive the Merger Consideration with respect to each of the Shares
represented thereby. If payment is to be made to a person other than the person
in whose name a Certificate so surrendered is registered, it shall be a
condition of payment that the Certificate so surrendered be properly endorsed
and otherwise in proper form for transfer and that the person requesting such
payment pay to the Exchange Agent any transfer or other taxes required by reason
of the payment to a person other than the registered holder of the Certificate
surrendered, or shall establish to the satisfaction of Purchaser or the Exchange
Agent that such tax has been paid or is not applicable. In no event will the
holder of any surrendered Certificate be entitled to receive interest on any of
the Merger Consideration. Neither the Exchange Agent nor the Surviving
Corporation will be liable to a
3
<PAGE>
Stockholder for any amount paid to a public official pursuant to any applicable
abandoned property, escheat or similar law.
Pursuant to the Merger Agreement, any portion of the funds made available to
the Exchange Agent for the payment of Merger Consideration which remains
unclaimed by the holders of Shares for one year after the consummation of the
Merger will be delivered to the Surviving Corporation upon demand of the
Surviving Corporation, and any former Stockholders will thereafter look only to
the Surviving Corporation for payment of their claim for the Merger
Consideration for the Shares.
At the Effective Time, the stock transfer books of the Company will be
closed, and no transfer of Shares or any shares of capital stock will thereafter
be made. Subject to any applicable abandoned property, escheat or similar laws,
if, after the Effective Time, Certificates are presented to the Surviving
Corporation for transfer, they will be canceled and exchanged as described in
the preceding paragraphs.
BOOK-ENTRY TRANSFER.
The Exchange Agent will establish an account with respect to the Shares at
The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes
of the Merger. Any financial institution that is a participant in the Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Exchange Agent's
account in accordance with the Book-Entry Transfer Facility's procedures for
transfer. However, although delivery of Shares may be effected through
book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer
Facility, the letter of transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees and any other required
documents, must, in any case, be transmitted to, and received by, the Exchange
Agent at one of its addresses set forth on the letter of transmittal, or the
surrendering Stockholder must comply with the guaranteed delivery procedure
described in the letter of transmittal. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
4
<PAGE>
THE MERGER
BACKGROUND OF THE OFFER AND THE MERGER.
Management of the Company, Olivetti and Mannesmann have been acquainted with
one another for a number of years and have had, from time to time, discussions
concerning the respective businesses and strategies of their companies.
In 1988, the Company's former parent, Cellular Communications, Inc. ("CCI"),
began seeking joint venture opportunities to pursue wireless communications
businesses outside of the United States. In 1990, the Company became one of the
organizers and a party to OSR with, inter alia, Olivetti, Bell Atlantic
International Inc. ("Bell Atlantic"), Telia International AB ("Telia") and an
affiliate of Lehman Brothers.
In connection with CCI entering into an agreement with AirTouch
Communications, Inc. ("AirTouch") in 1990, the capital stock of the Company was
distributed to the stockholders of CCI in 1991. Since that time, the Company has
been an independent, publicly traded entity.
In February 1994, OSR entered into an agreement with Pronto Italia, S.p.A.
("Pronto") to form Omnitel as their combined applicant for the second Global
System for Mobile Communications ("GSM") license in Italy. GSM is the digital
technology for cellular telephone systems that most European countries have
agreed to adopt as a common standard. In March 1994, the Italian Government
announced that Omnitel was selected by the Italian Government as the licensee of
Italy's second GSM cellular telephone license (the "License").
Currently, the Company holds a 14.667% interest in OSR, which holds a 70%
interest in Omnitel. The Company, through its 14.667% interest in OSR, holds an
approximate 10.267% interest in Omnitel. The other current joint venturers in
OSR are OliMan Holding BV ("OliMan"), a joint venture currently owned 50.1% by
Olivetti and 49.9% by Mannesmann, Bell Atlantic and an affiliate of Lehman
Brothers (collectively, the "OSR Corporate Partners"). Pronto, which holds a 30%
interest in Omnitel, consists of AirTouch, Mannesmann and several smaller
partners.
Although in prior years, the Company pursued opportunities in countries
other than Italy, the value of the Company's interest in OSR, and thus indirect
interest in Omnitel, has come now to represent substantially all of the value of
the Company.
Recognizing the Company is a minority, indirect stockholder in Omnitel, and
that it could not control Omnitel's cash flows and, in particular, Omnitel's
payment of dividends, and cognizant of the contractual terms of the OSR Joint
Venture Agreement (as defined herein), the Company has always been alert to
opportunities to maximize the value of its Omnitel investment. In that
connection, the Company has from time to time conducted discussions with other
participants in the OSR and the Pronto consortia seeking to elicit any interest
they might have in a transaction. These discussions have occurred over a period
of years and as recently as the past several months, but had not resulted in any
proposal or offer to purchase the Company or its interest in OSR. In addition,
persons outside of OSR and the Pronto consortia had not contacted the Company
regarding its shareholdings in Omnitel.
Commencing in early 1995, management of the Company and Olivetti held
discussions concerning a strategic business combination between the two
companies. The discussions terminated in the summer of 1995.
In the first half of 1998, the Company had discussions with Telia (formerly
"Swedish Telecom"), including discussions about a potential transaction between
Telia and the Company in which the Company would acquire Telia's OSR stake for
either Company stock or a combination of Company stock, debt and cash. These
discussions were part of a series of various meetings for different purposes
that the Company had with Telia over a period of five years. Despite these
recent meetings, Telia ultimately entered into a transaction in which it sold
its interest in OSR to OliMan, which was announced on April 14, 1998.
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In February 1997, senior executives of the Company met with senior
executives of Mannesmann, and had a broad based discussion regarding their
respective interests in European telecommunications. A similar such discussion
occurred in January 1998, including executives of Olivetti as well as
Mannesmann.
In April 1998, Dr. Kurt Kinzius, Managing Director of Mannesmann Eurokom
GmbH, met with Mr. Ginsberg of the Company and discussed a potential transaction
between the Company and OliMan, which sought to increase its stake in Omnitel.
On July 6, 1998, Dr. Kinzius telephoned Mr. Ginsberg to arrange for a
meeting. A meeting took place on July 10 among Mr. Ginsberg, Dr. Kinzius and
Evan Newmark of Goldman Sachs & Co., acting on behalf of OliMan, in connection
with a possible transaction with the Company. At that meeting, various
structures for a transaction were considered and at the conclusion of this
meeting the attendees agreed to evaluate various alternatives for structuring a
transaction. On August 11, 1998, there was another meeting between the Company
and OliMan in London, England. The parties discussed various proposals for
structuring a transaction, but no satisfactory result could be reached.
On August 24, 1998, senior executives of the Company had a meeting with
senior executives of Bell Atlantic to discuss a possible transaction involving
the Company. This meeting was one of a series of meetings between senior
executives of the two companies in which possible transactions were discussed,
over the course of the past five years. However, shortly after the meeting, Bell
Atlantic's representatives communicated that they were not interested in
pursuing any transaction with the Company.
From time to time, senior executives of AirTouch have had informal
discussions concerning the Company's interest in OSR and possible transactions
with the Company. These discussions did not result in an extension of an offer
by AirTouch.
At a November meeting of OSR and Omnitel in Milan, Italy, representatives of
Olivetti and Mannesmann, including Dr. Kinzius and Marco De Benedetti, an
executive officer responsible for telecom strategy at Olivetti, approached Mr.
Ginsberg to meet again about a possible transaction involving the Company.
On November 30, 1998, representatives of Olivetti and Mannesmann and
Goldman, Sachs & Co. met with representatives of the Company and Wasserstein
Perella & Co., Inc. ("Wasserstein Perella"). Detailed negotiations then ensued
between representatives of Olivetti and Mannesmann, including Goldman, Sachs &
Co. and legal counsel, Willkie Farr & Gallagher and Dorsey & Whitney, and
representatives of the Company, including Wasserstein Perella and Skadden, Arps,
Slate, Meagher & Flom LLP. Simultaneously, representatives of Olivetti and
Mannesmann conducted their due diligence investigations of the Company. The
negotiations culminated in agreement on the terms of the Merger Agreement, the
Stockholders Agreement, the Option Agreement and the Guarantee (as defined in
the Merger Agreement). Pursuant to the terms of the Merger Agreement, on
December 17, 1998 Purchaser commenced the Offer at a price of $65.75 per Share
in cash without interest thereon. On January 19, 1999, Purchaser increased the
Offer to $80 per Share in cash without interest thereon.
As of the expiration of the Offer on February 1, 1999, 12,079,305 Shares
were tendered (representing approximately 55.4% of the Shares on a fully diluted
basis or 67.6% of the outstanding Shares and including Shares that are required
to be delivered in accordance with guaranteed delivery procedures). On February
2, 1999, the Company accepted the tender of such Shares. In accordance with the
terms of the Merger Agreement, effective as of February 2, 1999, Sidney R.
Knafel, Del Mintz and Warren Potash resigned as, and Marco De Benedetti, Dr.
Frank Esser, Dr. Kurt J. Kinzius and Luciano La Noce were appointed as, members
of the Board of Directors. On February 2, 1999, the Company consummated an offer
to purchase (accompanied by a related solicitation of consents regarding certain
covenant amendments) all of the Company's outstanding 9 1/2% Senior Discount
Notes due 2005 (the "Senior Notes") and purchased all of the outstanding Senior
Notes.
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OPINION OF THE COMPANY'S FINANCIAL ADVISOR; INFORMATION CONCERNING THE FINANCIAL
ADVISOR.
Wasserstein Perella was retained, pursuant to the terms of a letter
agreement, dated December 4, 1998 (the "Wasserstein Perella Letter Agreement"),
as financial advisor to the Company in connection with any proposed business
combination involving the Company and another party, including a merger of the
Company, the acquisition of 50% or more of the Company's outstanding capital
stock, the acquisition of all or a substantial portion of the assets of the
Company or similar transactions (a "Business Combination"). Pursuant to the
terms of the Wasserstein Perella Letter Agreement, the Company agreed to pay and
has paid Wasserstein Perella a fee of $2.0 million upon the execution of a
definitive agreement to effect a Wasserstein Transaction (as defined in the
Wasserstein Perella Letter Agreement). Pursuant to the terms of the Wasserstein
Perella Letter Agreement, an aggregate fee equal to $8.0 million (including the
$2.0 million previously paid) is payable to Wasserstein Perella, contingent upon
the consummation a Business Combination. The Company also agreed to pay
Wasserstein Perella additional fees in such amounts as will be customary given
the nature of the services provided, including reimbursement on a monthly basis
for Wasserstein Perella's travel and other reasonable out-of-pocket expenses
(including fees, disbursements and other charges of counsel to be retained by
Wasserstein Perella and of other consultants and advisors retained with the
Company's consent) as well as any sales or similar taxes.
Wasserstein Perella provided to the Company an opinion to the effect that
the consideration proposed to be paid in the Offer and the Merger is fair to
Stockholders from a financial point of view. Wasserstein Perella has, in the
past, provided financial advisory and financing services to the Company and has
received fees for the rendering of such services. In the ordinary course of
business, Wasserstein Perella may actively trade the securities of the Company
for its account and for the accounts of its customers and, accordingly, may at
any time hold a long or short position in such securities.
The full text of Wasserstein Perella's opinion dated December 11, 1998,
which sets forth assumptions made, matters considered and limits on the review
undertaken by Wasserstein Perella, is attached hereto as Exhibit E. The summary
of the Wasserstein Perella opinion set forth in this Information Statement is
qualified in its entirety by reference to the full text of the Wasserstein
Perella opinion attached hereto attached as Exhibit E. Stockholders are urged to
read the Wasserstein Perella opinion in its entirety. The Wasserstein Perella
opinion is addressed to the Board of Directors, is directed only to the fairness
to Stockholders from a financial point of view of the consideration to be paid
in the Offer and the Merger, does not address the merits of the underlying
decision of the Company to engage in the transactions contemplated by the Merger
Agreement and does not constitute a recommendation as to how Stockholders should
vote at the Special Meeting.
The Company also retained Donaldson, Lufkin & Jenrette ("DLJ"), pursuant to
the terms of a letter agreement, dated December 4, 1998 (the "DLJ Letter
Agreement"), as financial advisor to the Company in connection with a Business
Combination with the Parent. Pursuant to the terms of the DLJ Letter Agreement,
DLJ undertook to study and evaluate the Company and its business prospects,
identify and analyze the financial alternatives available to the Company,
develop the strategy and tactics to be used in evaluating these alternatives in
the market, provide analysis and advice in connection with a Business
Combination, as directed by the Company, assist in the negotiation of a
definitive agreement with the Company and provide such other financial advisory
services as the Company may request and agree upon in writing with DLJ.
As compensation for the services provided by DLJ, the Company agreed to pay
DLJ a fee of $100,000 upon execution of a definitive agreement to effect a DLJ
Transaction (as defined in the DLJ Letter Agreement). Additional cash
compensation in an amount equal to $1,500,000 payable in cash will be payable to
DLJ at consummation of a Business Combination. The Company also agreed to
reimburse DLJ promptly for all out-of-pocket expenses (including reasonable fees
and expenses of counsel) incurred by DLJ in connection with its engagement,
whether or not a Business Combination is consummated. In addition, if at any
time prior to 12 months after the termination of DLJ's engagement with the
Company a
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transaction other than a DLJ Transaction is consummated, for which, under the
DLJ Letter Agreement, DLJ is entitled to compensation, DLJ and the Company will
in good faith mutually agree upon acceptable compensation for DLJ, taking into
account, among other things, the results obtained and the custom and practice of
investment bankers of international standing acting in similar transactions.
In connection with Olivetti's tender offer for all the outstanding shares of
capital stock of Telecom Italia S.p.A., Olivetti has retained DLJ as a financial
advisor.
ACCOUNTING TREATMENT OF THE MERGER.
The Merger will be accounted for under the "purchase" method of accounting
whereby the purchase price will be allocated based on the fair values of assets
acquired and liabilities assumed.
REASONS FOR THE BOARD OF DIRECTORS' RECOMMENDATIONS.
Prior to entering into the Merger Agreement, the Board of Directors and the
Company's senior management reviewed Omnitel's strategic position in the Italian
cellular telephone industry, the near and longer term prospects for that
industry, the consolidation trends within that industry and the strategic
alternatives available to the Company, all with a view to maximizing stockholder
value. In conducting its review, the Board of Directors considered the Company's
indirect, minority interest in Omnitel, the relationship among the other parties
that have interests in Omnitel, the consequences of various transaction
structures and the terms of the OSR Joint Venture Agreement and the License. The
Company also considered Omnitel's results of operations for the fiscal year
ended December 31, 1997 as well as for the fiscal quarter ended September 30,
1998. The Board of Directors also considered the recent trading prices of the
Common Stock. In light of the Board of Directors' review of Omnitel's
competitive position, recent operating results, the Company's stock price,
anticipated trends in the industry in which Omnitel competes, structural
considerations and the price per Share being offered by Purchaser, the Board of
Directors determined that it would be in the best interest of the Stockholders
to approve the Merger Agreement, the Option Agreement, the Stockholders
Agreement and the Guarantee (collectively, the "Transaction Agreements"). In
approving the Transaction Agreements and the transactions contemplated thereby
and recommending that all holders of Shares tender their Shares pursuant to the
Offer, the Board of Directors considered a number of factors including:
(i) the terms of the Merger Agreement, the Stockholders Agreement executed
by certain Stockholders in connection therewith, including provisions allowing
the Stockholders' Shares to be voted in favor of a competing offer if the Merger
Agreement were terminated by the Company in accordance with its terms to allow
the Company to enter into an agreement with any such competing bidder, the
Option Agreement and the Guarantee;
(ii) the trading price of shares of the Common Stock, and the expected
trading prices for the foreseeable future;
(iii) the contractual terms of the OSR Joint Venture Agreement and of the
License; the fact that the Company's interest in OSR is a minority interest with
only an indirect interest in Omnitel and limited governance rights;
(iv) Omnitel's competitive position and current business and regulatory
trends in the Italian cellular telephone industry and the European cellular
telephone industry, including Omnitel's rapid growth in the past and the
Company's view of Omnitel's future;
(v) a range of other possible buyers of the Company that are not currently
affiliated with either OSR or Pronto, ultimately concluding that it was unlikely
that any such buyer would be forthcoming given the existing configuration of
Omnitel;
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(vi) Wasserstein Perella's opinion that the Merger Consideration to be
received by the Stockholders, other than Stockholders who are affiliates of the
Company, is fair to such Stockholders from a financial point of view, as well as
a presentation by Wasserstein Perella of various financial analyses relating to
the Merger, including among other things a review of the Company's historical,
financial and stock market performance; a review of selected stock trading data
for selected companies that have European cellular telephone operations; and a
number of discounted cash flow analyses at various discount rates and terminal
values based on Omnitel's projections for its future performance;
(vii) the Company's understanding of the Mannesmann, Olivetti and Bell
Atlantic relationship, which the Company believes would effectively reduce
competition among them for an acquisition of the Company;
(viii) the tax impact of a sale of the Company's interest in Omnitel as
compared with a sale of the Company pursuant to the structure contemplated by
the Merger Agreement; and
(ix) the fact that Olivetti and Mannesmann have executed a Guarantee
regarding the financial obligations of Purchaser under the Merger Agreement
including its ability to purchase the Shares pursuant to the Offer and the
Merger.
The Board of Directors did not assign relative weight to the above factors
or determine that any factor was of particular importance. Rather, the Board of
Directors viewed its position and recommendations as being based on the totality
of the information presented to and considered by it.
FINANCING OF THE MERGER.
Purchaser estimates that the total amount of funds required to purchase the
number of Shares that are outstanding pursuant to the Offer and the Merger, and
to pay fees and expenses related to the Offer and the Merger, will be
approximately $1.75 billion. Purchaser plans to obtain all funds needed for the
Merger through capital contributions from Olivetti and Mannesmann. Olivetti and
Mannesmann will provide such funds from working capital.
CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
GENERAL. Except as described herein, based on information provided by the
Company, none of the Company, Purchaser, Olivetti or Mannesmann is aware of any
license or regulatory permit that appears to be material to the business of the
Company and its subsidiaries, taken as a whole, that might be adversely affected
by the acquisition of Shares by Purchaser pursuant to the Merger or otherwise or
of any approval or other action by any governmental, administrative or
regulatory agency or authority, domestic or foreign, that would be required
prior to the acquisition of Shares by Purchaser pursuant to the Merger or
otherwise. Should any such approval or other action be required, Purchaser
presently contemplates that such approval or other action will be sought, except
as described below under "State Antitakeover Statutes."
RULE 13E-3. The Securities and Exchange Commission (the "Commission") has
adopted Rule 13e-3 under the Securities Exchange Act of 1934, as amended
("Exchange Act"), which is applicable to certain "going private" transactions
and which may under certain circumstances be applicable to the Merger or another
business combination following the purchase of Shares pursuant to the Offer in
which Purchaser seeks to acquire the remaining Shares not held by it. Purchaser
believes, however, that Rule 13e-3 will not be applicable to the Merger because
it is anticipated that the Merger would be effected within one (1) year
following consummation of the Offer and, in the Merger, Stockholders would
receive the same price per Share as paid in the Offer. If Rule 13e-3 were
applicable to the Merger, it would require, among other things, that certain
financial information concerning the Company, and certain information relating
to the fairness of the proposed transaction and the consideration offered to
minority Stockholders in such a
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transaction, be filed with the Commission and disclosed to minority Stockholders
prior to consummation of the transaction.
APPRAISAL RIGHTS. Stockholders who do not vote in favor of the Merger may,
under certain circumstances and by following the procedures prescribed by
Section 262 of the DGCL ("Section 262"), exercise appraisal rights and receive
cash for their Shares.
If a Stockholder exercises appraisal rights in connection with the Merger
under Section 262, any Shares with respect to which such rights have been
exercised and perfected will not be converted into the Merger Consideration but
instead will be converted into the right to receive such consideration as may be
determined by the Delaware Court of Chancery (the "Court") to be due with
respect to such Shares pursuant to the laws of the State of Delaware.
The following summary of the provisions of Section 262 is not intended to be
a complete statement of such provisions and is qualified in its entirety by
reference to the full text of Section 262, a copy of which is attached to this
Information Statement as Exhibit D and incorporated herein by reference.
Stockholders as of the Record Date who hold their Shares continuously
through the Effective Time, who follow the procedures in Section 262 with
respect to appraisal of their Shares and who have not voted in favor of the
Merger, will be entitled to have their Shares appraised by the Court and to
receive payment of the fair value of such Shares as of the Effective Time, as
described below.
If a proposed merger for which appraisal rights are provided under Section
262 is to be submitted for approval at a meeting of stockholders, the
corporation, not less than 20 days prior to the meeting, must notify each of its
stockholders, who was such on the record date for such meeting, that appraisal
rights are available and must provide each such stockholder with a copy of
Section 262. This Information Statement is being sent by personal delivery or by
mail on or about March 3, 1999 to all Stockholders of record on March 1, 1999,
the Record Date, and constitutes notice of the appraisal rights available to
such holders under Section 262. As indicated above, a copy of the full text of
Section 262 is attached hereto as Exhibit D. A Stockholder electing to demand
appraisal of his or her Shares must do so by a separate written demand as
provided in Section 262 prior to the taking of the vote on the Merger at the
Special Meeting. A vote against the Merger will not constitute a demand for
appraisal. Voting in favor of the approval and adoption of the Merger Agreement
will constitute a waiver of the Stockholder's right of appraisal and will
nullify any written demand for appraisal submitted by the Stockholder. A
Stockholder who elects to exercise appraisal rights should mail or deliver,
before the taking of the vote on the Merger, his or her separate written demand
to Cellular Communications International, Inc., 331 West 57th Street, Box 259,
New York, New York 10019. The demand should specify the holder's name and
mailing address, the number of Shares owned and that such holder is demanding
appraisal of his or her Shares. Only a holder of record of Shares (or such
holder's duly appointed representative) is entitled to assert appraisal rights
for the Shares registered in that holder's name.
Within ten days after the Effective Time, the Company must notify each
Stockholder who has complied with Section 262 and has not voted in favor of the
Merger of the date that the Merger became effective.
Within 120 days after the Effective Time, any Stockholder who has
continuously held his or her Shares through the Effective Time, has made a valid
written demand and has not voted in favor of approval and adoption of the Merger
Agreement and the Merger may file a petition in the Court demanding a
determination of the value of his or her Shares, and (ii) upon written request,
receive from the Company a statement setting forth the aggregate number of
Shares not voted in favor of approval and adoption of the Merger Agreement and
the Merger and with respect to which demands for appraisal have been received
and the aggregate number of holders of such Shares. Such statement must be
mailed to the Stockholder within the later of ten days after the written request
therefor has been received by the Company or within ten days after expiration of
the period for delivery of demands for appraisal.
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If a petition for an appraisal is timely filed, at a hearing on such
petition, the Court will determine the Stockholders who have become entitled to
appraisal rights and will determine the "fair value" of the Shares, exclusive of
any element of value arising from the accomplishment or expectation of the
Merger, together with a fair rate of interest, if any, to be paid upon the
amount determined to be the fair value. In determining such "fair value," the
Court is required to take into account all relevant factors and in determining
the fair rate of interest, the Court may consider the rate of interest which the
surviving corporation would have had to pay to borrow money during the pendency
of the proceeding. The costs of the proceeding may be determined by the Court
and taxed upon the parties as the Court deems equitable in the circumstances.
Upon application by a Stockholder, the Court may also order that all or a
portion of the expenses incurred by any Stockholder in connection with the
appraisal proceeding, including, without limitation, reasonable attorneys' fees
and the fees and expenses of experts, be charged pro rata against the value of
all Shares entitled to appraisal.
Any Stockholder who has duly demanded appraisal rights under Section 262
will not, after the Effective Time, be entitled to vote the Shares subject to
such demand for any purpose or be entitled to the payment of dividends or other
distributions on such Shares (except dividends or other distributions payable to
Stockholders of record as of a date prior to the Effective Time).
If any holder of Shares who demands appraisal rights under Section 262
effectively withdraws or loses his or her right to appraisal, the Shares of such
holder will be converted into a right to receive the Merger Consideration as
provided in the Merger Agreement. A holder will effectively lose such holder's
right to appraisal if such holder votes in favor of approval and adoption of the
Merger Agreement and the Merger, or if no petition for appraisal is filed within
120 days after the Effective Time, or if the holder delivers to the Company a
written withdrawal of such holder's demand for an appraisal and an acceptance of
the Merger Consideration, except that any such attempt to withdraw made more
than 60 days after the Effective Time requires the written approval of the
Company. A Stockholder may also lose such holder's right to appraisal if such
holder fails to comply with the Court's direction to submit the Certificates
representing such Shares to the Register in Chancery for notation thereon of the
pendency of the appraisal proceedings.
LITIGATION. Following the announcement of the proposed acquisition of the
Company by Purchaser, three putative class actions on behalf of Stockholders
were filed in the Delaware Court of Chancery.
PHYLLIS FREIMAN V. SIDNEY R. KNAFEL, ET AL. On December 28, 1998, Phyllis
Freiman, individually and on behalf of all other holders of Common Stock and
their successors in interest, filed a purported class action complaint in the
Court against the Company and each of the Company's directors. The complaint
alleges, among other things, that the defendants breached their fiduciary duties
to the Company and the Stockholders by (i) entering into the Merger Agreement
for unfair and inadequate consideration, (ii) failing to disclose in the
Solicitation/Recommendation Statement on Schedule 14D-9, filed with the
Commission on December 17, 1998, as amended (the "Schedule 14D-9"), or Schedule
14D-1 material information regarding the Company's projected earnings and/or
prospects, (iii) omitting from the Schedule 14D-9 certain information regarding
financial advisor Wasserstein Perella, (iv) agreeing to certain termination
provisions in the Merger Agreement, and (v) by entering into the Stockholders
Agreement with Olivetti and Mannesmann. The plaintiff seeks as relief, among
other things, (i) an order from the Court (A) preliminarily and permanently
enjoining the defendants from proceeding with, consummating, or closing the
proposed Merger and related transactions, or (B) rescinding the proposed Merger
and related transactions in the event that it is consummated and awarding
rescissory damages, (ii) compensatory monetary damages and interest, and (iii)
attorneys' fees and expenses.
FLORENCE MARCUS V. WILLIAM B. GINSBERG, ET AL. On December 30, 1998,
Florence Marcus, individually and on behalf of all other holders of Common
Stock, filed a purported class action complaint in the Court against the Company
and each of the Company's directors. The complaint alleges, among other things,
that the defendants breached their fiduciary duties to the Company and the
Stockholders by (i) entering
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into the Merger Agreement for unfair consideration, (ii) failing to disclose in
the Schedule 14D-9 or Schedule 14D-1 material information regarding the
Company's projected earnings and/or prospects, (iii) omitting from the Schedule
14D-9 certain information regarding financial advisor Wasserstein Perella, (iv)
agreeing to certain termination provisions in the Merger Agreement, and (v)
entering into the Stockholders Agreement with Olivetti and Mannesmann. The
plaintiff seeks as relief, among other things, (i) an order from the Court (A)
enjoining the defendants from proceeding with the Merger Agreement, and (B)
rescinding, to the extent already implemented, the Merger Agreement or any of
the terms thereof, and (ii) unspecified monetary damages and attorneys' fees and
expenses.
ELLEN KLEIN V. SIDNEY R. KNAFEL, ET AL. On January 22, 1999, Ellen Klein,
individually and on behalf of all other holders of Common Stock and their
successors in interest, filed a purported class action complaint in the Court
against the Company and each of the Company's directors. The complaint alleges,
among other things, that the defendants breached their fiduciary duties to the
Company and the Stockholders by (i) entering into the Merger Agreement for
unfair and inadequate consideration, (ii) failing to disclose in the Schedule
14D-9 or Schedule 14D-1 material information regarding the Company's projected
earnings and/or prospects, (iii) omitting from the Schedule 14D-9 certain
information regarding financial advisor Wasserstein Perella, (iv) agreeing to
certain termination provisions in the Merger Agreement, and (v) by entering into
the Stockholders Agreement with Olivetti and Mannesmann. The plaintiff seeks as
relief, among other things, (i) an order from the Court (A) preliminarily and
permanently enjoining the defendants from proceeding with, consummating, or
closing the proposed Merger and related transactions, or (B) rescinding the
proposed Merger and related transactions in the event that it is consummated and
awarding rescissory damages, (ii) compensatory monetary damages and interest,
and (iii) attorneys' fees and expenses.
STATE ANTITAKEOVER STATUTES. Section 203 of the DGCL, in general, prohibits
a Delaware corporation, such as the Company, from engaging in a "Business
Combination" (defined as a variety of transactions, including mergers) with an
"Interested Stockholder" (defined generally as a person that is the beneficial
owner of 15% or more of the outstanding voting stock of the subject corporation)
for a period of three years following the date that such person became an
Interested Stockholder unless, prior to the date such person became an
Interested Stockholder, the board of directors of the corporation approved
either the Business Combination or the transaction that resulted in the
stockholder becoming an Interested Stockholder. The provisions of Section 203 of
the DGCL are not applicable to any of the transactions contemplated by the
Merger Agreement, because the Merger Agreement and the transactions contemplated
thereby were approved by the Board of Directors prior to the execution thereof.
Purchaser does not believe that the antitakeover laws and regulations of any
state other than the State of Delaware will by their terms apply to the Merger,
and, except as set forth above with respect to Section 203 of the DGCL,
Purchaser has not attempted to comply with any state antitakeover statute or
regulation. Purchaser reserves the right to challenge the applicability or
validity of any state law purportedly applicable to the Merger, and nothing
herein or any action taken in connection with the Merger is intended as a waiver
of such right. If it is asserted that any state antitakeover statute is
applicable to the Merger and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Merger, Purchaser might be required to
file certain information with, or to receive approvals from, the relevant state
authorities, and Purchaser may be delayed in consummating the Merger.
ANTITRUST. The Offer and the Merger are subject to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), which provides
that certain acquisition transactions may not be consummated unless certain
information has been furnished to the Antitrust Division of the Department of
Justice (the "DOJ") and the Federal Trade Commission (the "FTC") and certain
waiting period requirements have been satisfied. Pursuant to the requirements of
the HSR Act, Olivetti, Mannesmann and Purchaser filed their Notification and
Report Forms with respect to the Offer and the Merger with the
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DOJ and the FTC on December 23, 1998. Early termination of the waiting period
under the HSR Act with respect to the Offer and the Merger was granted effective
as of January 5, 1999.
INTERESTS OF CERTAIN PERSONS IN THE MERGER.
Mr. Marco De Benedetti, Dr. Frank Esser, Dr. Kurt J. Kinzius and Mr. Luciano
La Noce have each served as a director or officer of the Company since February
2, 1999 and also serve in various capacities as directors, officers or employees
of Purchaser, Olivetti and/or Mannesmann.
CIR S.p.A. ("CIR") beneficially owns $3,000,000 aggregate principal amount
of 6% Convertible Subordinated Notes due 2005 (the "Convertible Notes") issued
by the Company. CIR is a majority owned subsidiary of Compagnia Finanziaria De
Benedetti S.p.A. ("COFIDE"). Mr. Marco De Benedetti, a Co-Chairman of the Board
of Directors of the Company, director, Co-President and Co-Secretary of
Kensington Acquisition Sub, Inc. and an executive officer responsible for
telecom strategy at Olivetti, is a member of the Board of Directors of COFIDE.
The Convertible Notes owned by CIR are convertible into 75,100 Shares, which
represent approximately .41% of the outstanding Shares, assuming conversion of
all the Convertible Notes beneficially owned by CIR.
CERTAIN EFFECTS OF THE CONSUMMATION OF THE MERGER.
Upon consummation of the Merger, Purchaser will delist the Shares, terminate
the registration of the Shares under the Exchange Act and terminate the duty of
the Company to file reports under the Exchange Act. Once the Shares are not
listed on the Nasdaq National Market or any other national exchange, the Shares
will no longer constitute "margin securities" under the rules of the Federal
Reserve Board, with the result, among others, that lenders may no longer extend
credit on collateral of the Shares.
In addition, at the Effective Time, each outstanding Share will be converted
into the right to receive the Merger Consideration and the holders of Shares
immediately before the consummation of the Merger will possess no further
interest in, or rights as stockholders of, the Company.
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THE MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement and
is qualified in its entirety by reference to the Merger Agreement, a copy of
which is attached hereto as Exhibit A and is incorporated herein by reference.
THE OFFER. The Merger Agreement provides that Purchaser will commence the
Offer and that, upon the terms and subject to the prior satisfaction or waiver
of the conditions of the Offer, Purchaser will purchase all Shares validly
tendered pursuant to the Offer. On February 2, 1999, Purchaser accepted the
tender of 12,079,305 Shares pursuant to the Offer.
THE MERGER. Following the consummation of the Offer, the Merger Agreement
provides that, subject to the terms and conditions thereof, at the Effective
Time Purchaser shall be merged with and into the Company and, as a result of the
Merger, the separate corporate existence of Purchaser shall cease and the
Company shall continue as the Surviving Corporation.
The respective obligations of Purchaser, on the one hand, and the Company,
on the other hand, to effect the Merger are subject to the satisfaction on or
prior to the Closing Date (as defined in the Merger Agreement) of each of the
following conditions, unless such failure of any such conditions is a result of
a breach of either party's material obligations under the Merger Agreement: (i)
Purchaser shall have made, or caused to be made, the Offer and shall have
purchased, or caused to be purchased, Shares pursuant to the Offer, (ii) the
Merger and the Merger Agreement shall have been approved and adopted by the
requisite vote of the Stockholders, if required by the DGCL, and (iii) no
statute, rule, regulation, judgment, writ, decree, order or injunction shall
have been enacted, promulgated, entered or enforced by any governmental
authority which has the effect of making illegal or directly or indirectly
restraining, prohibiting or restricting the consummation of the Merger.
At the Effective Time (i) each issued and outstanding Share (other than
Shares that are owned by the Company or any of its subsidiaries, any Shares
owned by Purchaser or any of its subsidiaries or any Shares which are held by
Stockholders who properly perfect their dissenters rights under the DGCL) will
be canceled and converted into the right to receive the Merger Consideration,
without interest, upon the surrender of the Certificate formerly representing
such Share in accordance with the Merger Agreement and (ii) each issued and
outstanding share of the common stock, par value $.01 per share, of Purchaser
will be converted into one share of common stock, par value $.01 per share, of
the Surviving Corporation and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation.
THE BOARD OF DIRECTORS. The Merger Agreement provides that promptly upon
the purchase by Purchaser of any Shares pursuant to the Offer, Purchaser shall
be entitled to designate such number of directors, rounded up to the next whole
number, on the Board of Directors as will give Purchaser representation on the
Board of Directors equal to at least that number of directors which equals the
product of the total number of directors on the Board of Directors (giving
effect to the directors appointed or elected by Purchaser pursuant to the Merger
Agreement and including directors serving as officers of the Company) multiplied
by the percentage that the aggregate number of Shares beneficially owned by
Purchaser or any of its affiliates (including Shares that are accepted for
payment pursuant to the Offer, but excluding Shares held by the Company and
excluding beneficial ownership by virtue of the Option Agreement (as defined
below)) bears to the number of Shares outstanding. The Company will, upon
request by Purchaser, promptly increase the size of the Board of Directors or
use its best efforts to secure the resignations of such number of its incumbent
directors as is necessary to enable Purchaser's designees to be elected to the
Board of Directors, provided that (i) in the event that Purchaser's designees
are appointed or elected to the Board of Directors, until the Effective Time the
Board of Directors will have at least one director who is a director as of the
date of the execution of the Merger Agreement and who is neither an officer of
the Company nor a designee, Stockholder, affiliate or associate (within the
meaning of the Federal securities laws) of Purchaser (one or more of such
directors, the "Independent Directors") and
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<PAGE>
(ii) if no Independent Directors remain, the other directors will designate one
person to fill one of the vacancies who is neither an officer of the Company nor
a designee, Stockholder, affiliate or associate of Purchaser, such person so
designated being deemed an Independent Director.
STOCKHOLDERS' MEETING. Pursuant to the Merger Agreement, the Company will,
if required by applicable law in order to consummate the Merger, duly call, give
notice of, convene and hold a special meeting of its stockholders as promptly as
practicable following the acceptance for payment and purchase of Shares by
Purchaser pursuant to the Offer for the purpose of considering and taking action
upon the approval of the Merger and the adoption of the Merger Agreement. The
Merger Agreement provides that the Company will, if required by applicable law
in order to consummate the Merger, prepare and file with the Commission a
preliminary and definitive proxy or information statement (the "Proxy
Statement") relating to the Merger and the Merger Agreement and use its best
efforts (i) to obtain and furnish the information required to be included by the
Commission in the Proxy Statement and, after consultation with Purchaser, to
respond promptly to any comments made by the Commission with respect to the
preliminary Proxy Statement and cause the definitive Proxy Statement to be
mailed to its Stockholders, provided that no amendment or supplement to the
Proxy Statement will be made by the Company without consultation with Purchaser
and its counsel and (ii) to obtain the necessary approvals of the Merger and the
Merger Agreement by its Stockholders. Having acquired a majority of the
outstanding Shares in the Offer, Purchaser has sufficient voting power to
approve the Merger, even if no other Stockholder votes in favor of the Merger.
The Company has agreed to include in the Proxy Statement the recommendation of
the Board of Directors that Stockholders vote in favor of the approval of the
Merger and the adoption of the Merger Agreement unless the Board of Directors,
after consultation with outside legal counsel to the Company, determines that to
do so would likely breach the fiduciary duties of the Board of Directors under
applicable law. This Information Statement constitutes the Proxy Statement
referred to above.
The Merger Agreement provides that in the event that Purchaser or any
subsidiary of Purchaser acquires at least 90% of the outstanding Shares pursuant
to the Offer or otherwise, Purchaser and the Company will, at the request of
Purchaser and subject to the terms of the Merger Agreement, take all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of Stockholders, in
accordance with DGCL.
OPTIONS. Pursuant to the Merger Agreement, at the Effective Time, the
Company will take all actions necessary to provide that each then outstanding
option to purchase shares of Common Stock (the "Options") granted under any of
the Company's stock option plans (the "Option Plans"), whether or not then
exercisable or vested, shall be canceled and in consideration therefor will
receive an amount in cash equal to the product of (A) the difference between the
Merger Consideration and the per share exercise price of such Option and (B) the
number of Shares subject to such Option (such amount, the "Option Price"). The
Company will obtain all necessary consents or releases from holders of the
Options to effect the foregoing. Upon receipt of the Option Price, the Option
will be canceled. The surrender of an Option to the Company will be deemed a
release of any and all rights a holder had or may have had in respect of such
Option. Except as may be otherwise agreed to by Purchaser and the Company and to
the extent permitted by the Option Plans, the Company (i) shall cause the Option
Plans to terminate as of the Effective Time and shall provide for the payment of
any benefit due under such Option Plans in cash; (ii) shall cause the provisions
in any other plan, program or arrangement, which currently provides or
previously provided for the issuance or grant by the Company of any interest in
respect of the capital stock of the Company, or for payments based on the value
of the capital stock of the Company, to terminate as of the Effective Time and
shall provide for the payment of any benefit due under such plans in cash and
(iii) shall take all actions necessary to ensure that following the Effective
Time no holder of Options or any participant in the Option Plans or any other
stock plan shall have any right thereunder to acquire any equity securities of
the Company, the Surviving Corporation or any subsidiary thereof, and to
terminate all such plans. Purchaser has agreed to provide the Company as
promptly as practicable following the
15
<PAGE>
consummation of the Merger the funds necessary to satisfy such obligations
regarding the Options under the Merger Agreement.
DEBT TENDER OFFER. Pursuant to the Merger Agreement, upon the request of
Purchaser, the Company commenced an offer to purchase (the "Debt Offer to
Purchase") (accompanied by a related solicitation of consents regarding certain
covenant amendments) all of the Senior Notes. On February 2, 1999, the Company
consummated the Debt Offer to Purchase and purchased all of the outstanding
Senior Notes.
INDEMNIFICATION AND INSURANCE. The Company shall, to the fullest extent
permitted under the DGCL and regardless of whether the Merger becomes effective,
indemnify, defend and hold harmless, and after the Effective Time, Purchaser and
the Surviving Corporation shall jointly and severally, to the fullest extent
permitted under DGCL, indemnify, defend and hold harmless, the present and
former officers, directors, employees and agents of the Company against any
costs or expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages, liabilities and amounts paid in settlement in
connection with any claim, action, suit, proceeding or investigation, including
without limitation, liabilities arising out of the Merger. The Merger Agreement
also provides that the Surviving Corporation will maintain or obtain directors'
and officers' liability insurance ("D&O Insurance") for a period of not less
than three years after the Effective Time, provided, however, that if the
aggregate annual premiums for such D&O Insurance at any time exceeds 150% of the
per annum rate of premium currently paid by the Company for such insurance as in
effect on the date of the Merger Agreement, then Purchaser will cause the
Company (or the Surviving Corporation if after the Effective Time) to provide
the maximum coverage then available at an annual premium equal to 150% of such
rate.
STOCKHOLDERS AGREEMENT.
The following is a summary of certain portions of the Stockholders
Agreement, dated as of December 11, 1998, among Purchaser, the Company and
certain Stockholders (the "Stockholders Agreement") and is qualified in its
entirety by reference to the Stockholders Agreement, a copy of which is attached
hereto as Exhibit B and is incorporated herein by reference.
As a condition and inducement to Purchaser entering into the Merger
Agreement, concurrently with the execution and delivery of the Merger Agreement,
Purchaser entered into the Stockholders Agreement with the Company and certain
Stockholders, pursuant to which such Stockholders agreed to tender pursuant to
the Offer all Shares owned by them, as well as any Shares acquired by them after
the date of the Stockholders Agreement.
In addition, the Stockholders subject to the Stockholders Agreement have
agreed that, at any meeting of the Stockholders, or in connection with any
written consent of the Stockholders, they will vote (i) in favor of the Merger,
the execution and delivery by the Company of the Merger Agreement and the
approval and adoption of the Merger and the terms thereof and each of the other
actions contemplated by the Merger Agreement and the Stockholders Agreement;
(ii) against any action or agreement that would (a) result in a breach of any
covenant, representation or warranty or any other obligation or agreement of the
Company under the Merger Agreement or of such Stockholder under the Stockholders
Agreement or (b) impede, interfere with, delay, postpone or adversely affect the
Merger or the transactions contemplated thereby or by the Stockholders
Agreement; and (iii) except as otherwise agreed to in writing in advance by
Purchaser, against the following actions (other than the Merger and the
transactions contemplated by the Merger Agreement and the Stockholders
Agreement): (a) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or any of its
subsidiaries; (b) any sale, lease or transfer of a material amount of the assets
or business of the Company or its subsidiaries, or any reorganization,
restructuring, recapitalization, special dividend, dissolution, liquidation or
winding up of the Company or its subsidiaries; (c) any change in the present
capitalization of the Company, including any proposal to sell any equity
interest in the Company or any of its subsidiaries or any amendment of the
Company's Certificate of Incorporation or Bylaws; (d) any change
16
<PAGE>
in the majority of the Board of Directors; (e) any other change in the Company's
corporate structure or business; and (f) any other action which is intended or
could reasonably be expected to impede, interfere with, delay, postpone,
discourage or affect the Merger, the transactions contemplated by the Merger
Agreement or the Stockholder Agreement or the contemplated economic benefits of
any of the foregoing. Each Stockholder subject to the Stockholders Agreement has
granted to and appoints Purchaser such Stockholder's proxy and attorney-in-fact
to vote the Shares owned by such Stockholder in favor of the Merger, the
execution and delivery by the Company of the Merger Agreement and the approval
and adoption of the Merger and the terms thereof and each of the other actions
contemplated by the Merger Agreement and the Stockholders Agreement.
The Stockholders subject to the Stockholders Agreement have agreed that
until the earlier of the Effective Time and the termination of the Merger
Agreement, they will not, directly or indirectly, (i) transfer any or all Shares
owned by them, (ii) except with respect to Purchaser, grant any proxies or
powers of attorney, deposit any Shares owned by them into a voting trust or
enter into a voting agreement, understanding or arrangement with respect to such
Shares, or (iii) take any action that would make any representation or warranty
of such Stockholder contained in the Stockholders Agreement untrue or incorrect
or would result in a breach by such Stockholder of its obligations under the
Stockholders Agreement or a breach by the Company of its obligations under the
Merger Agreement. However, Stockholders subject to the Stockholders Agreement
may transfer Shares to an affiliate of such Stockholder, any member of such
Stockholder's immediate family, a trust for the benefit of family members of
such Stockholders, or any charitable organizations (as defined in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code")).
OPTION AGREEMENT.
The following is a summary of certain portions of the Option Agreement,
dated as of December 11, 1998, between Purchaser and the Company (the "Option
Agreement") and is qualified in its entirety by reference to the Option
Agreement, a copy of which is attached hereto as Exhibit C and is incorporated
herein by reference.
As a condition and inducement to Purchaser's entering into the Merger
Agreement, concurrently with the execution and delivery of the Merger Agreement,
Purchaser and the Company entered into the Option Agreement, pursuant to which,
among another things, the Company granted Purchaser an irrevocable option to
purchase up to 4,338,133 newly issued Shares (the "Company Option") at a
purchase price per Share of $65.75 (the "Exercise Price"), provided, however,
that in no event shall the number of Shares for which the Company Option is
exercisable exceed 19.9% of the Company's issued and outstanding shares of
Common Stock. The Option Agreement will terminate, and the Company Option will
expire, on the earliest of (i) the Effective Time and (ii) to the extent that
Purchaser has given no notice of its intention to exercise all or any part of
the Company Option, six (6) months after any termination of the Merger Agreement
pursuant to Section 8.1(b), (f)(ii), (g), (h) or (i) thereof and at the time of
termination of the Merger Agreement pursuant to Section 8.1(a), (c), (d), (e) or
(f)(i) thereof.
Purchaser (or its designee) may exercise the Company Option, in whole or in
part, if, on or after the date of the Option Agreement: (a) any corporation,
partnership, individual, trust, unincorporated association, or other entity or
"person" (as defined in Section 13(d)(3) of the Exchange Act), other than
Purchaser or any of its affiliates (a "Third Party"): (i) commences or announces
an intention to commence a tender offer or exchange offer for any shares of
Common Stock, the consummation of which would result in beneficial ownership by
such Third Party (together with all such Third Party's affiliates and
associates) of 15% or more of the then outstanding voting equity of the Company
(either on a primary or a fully diluted basis); or (ii) acquires beneficial
ownership of shares of Common Stock which, when aggregated with any Shares
already owned by such Third Party, its affiliates and associates, would result
in the aggregate beneficial ownership by such Third Party, its affiliates and
associates of 15% or more of the then outstanding voting equity of the Company
(either on a primary or a fully diluted basis); provided, however,
17
<PAGE>
that "Third Party" for purposes of this clause (ii) shall not include any
corporation, partnership, person, other entity or group which beneficially owns
more than 15% of the outstanding voting equity of the Company (either on a
primary or a fully diluted basis) as of the date of the Option Agreement and
that does not, after the date of the Option Agreement, increase such ownership
percentage by more than an additional 1% of the outstanding voting equity of the
Company (either on a primary or a fully diluted basis); or (b) any of the events
described in Sections 8.1(g) (so long as following the date of the Option
Agreement but prior to any termination there shall have been a proposal, inquiry
or expression of interest in connection with a Takeover Proposal (as defined in
the Merger Agreement)), 8.1(h) or 8.1(i) of the Merger Agreement that would
allow Purchaser to terminate the Merger Agreement has occurred (but without the
necessity of Purchaser having terminated the Merger Agreement).
At any time that Purchaser is entitled to exercise the Company Option,
Purchaser may elect, in its sole discretion, to sell the Company Option to the
Company in lieu of exercising the Company Option. The Company shall be required
to purchase the Company Option from Purchaser on the third business day after
Purchaser gives the Company written notice of such election for a cash price
(payable by certified or official bank check in same day funds to Purchaser or
its designee) equal to the product of the number of Shares then covered by the
Company Option multiplied by the excess over the Exercise Price of the greater
of (x) the closing price of a share of Common Stock on the Nasdaq National
Market on the last trading day prior to the date of such notice and (y) the
highest price per share of Common Stock paid or proposed to be paid to any
holder thereof by any person in any Takeover Proposal.
Notwithstanding any other provision of the Option Agreement, in no event
shall Purchaser's Total Profit (as defined below) exceed $14 million and, if it
otherwise would exceed such amount, Purchaser, at its sole election, shall
either (a) reduce the number of Shares subject to the Company Option, (b)
deliver to the Company for cancellation Shares previously purchased by
Purchaser, (c) pay cash to the Company, or (d) any combination thereof, so that
Purchaser's actually realized Total Profit shall not exceed $14 million after
taking into account the foregoing actions. As used herein, the term "Total
Profit" means the aggregate amount (before taxes) of the following: (i) (x) the
net cash amounts received by Purchaser pursuant to the sale of Shares (or any
other securities into which such Shares are converted or exchanged) to any
unaffiliated party, less (y) Purchaser's purchase price of such Shares, and (ii)
any Notional Total Profit (as defined below). As used herein, the term "Notional
Total Profit" with respect to the total number of Shares as to which Purchaser
could propose to exercise the Company Option shall be the Total Profit
determined as of the date of such proposal assuming that the Company Option were
fully exercised on such date for such number of Shares and assuming that such
Shares, together with all other Shares held by Purchaser and its affiliates as
of such date, were sold for cash at the closing market price for the Common
Stock as of the close of business on the preceding trading day (less customary
brokerage commissions).
THE OSR JOINT VENTURE AGREEMENT.
Pursuant to a joint venture agreement, originally executed in May 1990 and
amended on November 24, 1993 and February 23, 1994 (the "OSR Joint Venture
Agreement"), if more than fifty (50) percent of the shares of voting securities
of a co-venturer (the "Selling Co-Venturer") are transferred to a third party
(or parties) that is not an affiliate of the Selling Co-Venturer (an "OSR Change
in Control"), each co-venturer (a "Buying Co-Venturer") shall have the
non-assignable right to purchase all or a pro rata portion (based upon the total
number of shares owned by co-venturers exercising such right to purchase) of the
Selling Co-Venturer's shares of OSR stock at a price indicated by the Selling
Co-Venturer. In the event a Buying Co-Venturer objects to the price so
indicated, it shall be settled by arbitration. The acquisition of control of any
parent company of a co-venturer which owns or operates substantial other
businesses or entities in addition to the venture is not deemed to constitute an
OSR Change in Control. Mannesmann, Olivetti and Purchaser believe that the
consummation of the Offer did not result in an OSR Change in Control.
18
<PAGE>
Pursuant to the OSR Joint Venture Agreement, a co-venturer may, without the
consent of the other co-venturers, transfer its OSR stock to its affiliates,
other co-venturers or the affiliates of other co-venturers. A co-venturer may
not, however, sell, assign, transfer, pledge, encumber or otherwise dispose of
any of its OSR stock to a party who is not an affiliate, a co-venturer or an
affiliate of a co-venturer, without prior written consent of all the other
co-venturers. All transfers of OSR stock other than to affiliates, other
co-venturers or affiliates of other co-venturers are subject to a right of first
refusal by the other co-venturers. If more than one co-venturer exercises the
right of first refusal, each of the co-venturers may purchase a pro rata portion
of such OSR stock (based upon the total number of shares owned by all
co-venturers exercising the right of first refusal). Such rights of first
refusal may be exercised at the price indicated by the transferring co-venturer
in a notice that must be sent by the transferring co-venturer to the remaining
co-venturers prior to effecting a transfer that gives rise to a right of first
refusal.
Pursuant to the OSR Joint Venture Agreement, if a co-venturer willfully
fails to make required capital contributions, the other co-venturers shall have
the non-assignable option to purchase such co-venturer's OSR stock for a cash
price equal to the paid-in-capital represented by such stock. Pursuant to the
OSR Joint Venture Agreement, the following may also give rise to the granting of
a non-assignable option to purchase a co-venturer's OSR stock at the cash price
equal to the paid-in-capital represented by such stock: (i) the failure by a
co-venturer to perform any material obligation under the OSR Joint Venture
Agreement; (ii) the filing of a bankruptcy petition by a co-venturer, or (iii) a
willful violation or breach by a co-venturer of any of the covenants in the OSR
Joint Venture Agreement. If the non-assignable option to purchase a defaulting
co-venturer's OSR stock were triggered and the defaulting party refused to sell
its OSR stock, thereby breaching the relevant provisions of the OSR Joint
Venture Agreement, under Italian law, the Company may face difficulty in
becoming the record owner of the OSR stock and could thus be forced to bring an
action for damages against the co-venturer refusing to comply with such
provisions.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of certain U.S. federal income tax
consequences of the Merger relevant to a Stockholder whose Shares are converted
to cash in the Merger (a "Holder"). The discussion is based on the Code,
regulations issued thereunder, judicial decisions and administrative rulings,
all of which are subject to change, possibly with retroactive effect. The
following does not address the U.S. federal income tax consequences to all
categories of Holders that may be subject to special rules (e.g., Holders who
acquired their Shares pursuant to the exercise of employee stock options or
other compensation arrangements with the Company, Holders who perfect their
appraisal rights under the DGCL, foreign Holders, insurance companies,
tax-exempt organizations, dealers in securities and persons who have acquired
the Shares as part of a straddle, hedge, conversion transaction or other
integrated investment), nor does it address the federal income tax consequences
to persons who do not hold the Shares as "capital assets" within the meaning of
Section 1221 of the Code (generally, property held for investment). Holders
should consult their own tax advisors regarding the U.S. federal, state, local
and foreign income and other tax consequences of the Merger.
The receipt of cash for Shares pursuant to the Merger will be a taxable
transaction for U.S. federal income tax purposes and may also be a taxable
transaction under applicable state, local and foreign income and other tax laws.
In general, a Holder who receives cash in exchange for Shares pursuant to the
Merger will recognize gain or loss for federal income tax purposes equal to the
difference, if any, between the amount of cash received and the Holder's
adjusted tax basis in the Shares surrendered for cash pursuant to the Merger.
Gain or loss will be determined separately for each block of Shares (i.e.,
Shares acquired at the same cost in a single transaction) surrendered for cash
pursuant to the Merger. Such gain or loss will be long-term capital gain or loss
if the Holder has held the Shares for more than one (1) year at the time of the
consummation of the Merger. Under recently adopted amendments to the Code,
capital gains recognized by an individual investor (or an estate or certain
trusts) upon a disposition of a Share that has been held for more than one year
generally will be subject to a maximum tax rate of 20% or, in the case of a
Share that has been held for one year or less, will be subject to tax at
ordinary income rates. Certain limitations apply to the use of capital losses.
If the holder of an Option would have realized compensation income upon its
exercise, the amount of cash received by such holder will likewise constitute
compensation income.
A Holder who does not sell Shares in the Merger and who exercises his or her
appraisal rights with respect to such Shares will recognize capital gain or loss
(and may recognize an amount of interest income) attributable to any payment
received pursuant to the exercise of such rights based upon the principles
described above. See "Certain Legal Matters; Regulatory Approvals--Appraisal
Rights."
The federal income tax discussion set forth above is included for general
information only and is not intended to be a substitute for careful tax
planning. Moreover, the discussion is based upon present law and it is
impossible to predict the effect, if any, that future legislation could have on
the tax consequences of the Merger. Holders are urged to consult their own tax
advisors with respect to the specific tax consequences of the Merger to them,
including the application and effect of the alternative minimum tax, and state,
local and foreign tax laws.
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SELECTED CONSOLIDATED FINANCIAL INFORMATION OF THE COMPANY
Set forth below is certain consolidated financial information with respect
to the Company, excerpted or derived from the Company's Annual Reports on Form
10-K for the fiscal years ended December 31, 1997 and December 31, 1996 and its
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, each as
filed with the Commission pursuant to the Exchange Act.
More comprehensive financial information is included in such reports and in
other documents filed by the Company with the Commission. The following summary
is qualified in its entirety by reference to such reports and other documents
and all of the financial information (including any related notes) contained
therein. Such reports, documents and financial information may be inspected and
copies may be obtained from the Commission in the manner set forth below under
"Additional Information."
21
<PAGE>
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
(UNAUDITED) YEAR ENDED DECEMBER 31,
------------------------ -------------------------------------
<S> <C> <C> <C> <C> <C>
1998 1997 1997 1996 1995
----------- ----------- ----------- ----------- -----------
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Equity in net income (loss) of Omnitel............. $ 30,435 $ (7,628) $ (5,521) $ (29,850) $ (14,636)
General and administrative expenses................ 1,787 2,473 2,997 3,397 3,805
Write-off of investments in joint venture.......... -- -- -- -- 602
Write-off of deferred costs........................ -- -- -- -- 1,167
Depreciation expense................................. 1 14 15 25 28
Amortization of Investments in joint ventures...... 519 518 691 691 537
----------- ----------- ----------- ----------- -----------
2,307 3,005 3,703 4,113 6,139
----------- ----------- ----------- ----------- -----------
Operating income (loss).............................. 28,128 (10,633) (9,224) (33,963) (20,775)
Other income (expense):
Interest income and other, net..................... 4,064 3,307 4,500 5,125 1,963
Interest expense................................... (19,675) (19,644) (26,625) (23,330) (7,230)
Foreign currency translation losses................ (13,693) -- -- -- --
Cellular Comm., Inc. fees in connection with
the bank loan.................................... -- -- -- -- (101)
Gain on sale of investment in joint venture........ -- -- -- -- 38,901
Income (loss) before income taxes and extraordinary
item............................................... (1,176) (26,970) (31,349) (52,168) 12,758
Income tax benefit (provision)....................... -- -- -- $ 1,200 $ (5,943)
----------- ----------- ----------- ----------- -----------
Income (loss) before extraordinary item.............. (1,176) (26,970) (31,349) (50,968) 6,815
Loss from early extinguishment of debt............... (44,924) -- -- -- (1,474)
----------- ----------- ----------- ----------- -----------
Net income (loss).................................... $ (46,100) $ (26,970) $ (31,349) $ (50,968) $ 5,341
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Net income (loss) per common share:
Income (loss) before extraordinary item............ $ (.07) $ (1.67) $ (1.94) $ (3.23) $ (.45)
Extraordinary item................................. (2.72) -- -- -- (.10)
----------- ----------- ----------- ----------- -----------
Net income (loss).................................... $ (2.79) $ (1.67) $ (1.94) $ (3.23) $ .35
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Net income (loss) per common share-assuming dilution:
Income (loss) before extraordinary item............ $ (.07) $ (1.67) $ (1.94) $ (3.23) $ .38
Extraordinary item................................. (2.72) -- -- -- (.08)
----------- ----------- ----------- ----------- -----------
Net income (loss).................................... $ (2.79) $ (1.67) $ (1.94) $ (3.23) $ .30
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
BALANCE SHEET DATA:
Total Assets....................................... $ 169,407 $ 138,133 $ 140,714 $ 146,307 $ 175,290
Total Liabilities.................................. 270,124 192,743 199,483 174,868 154,123
Total Stockholders' Equity (Deficiency)............ (100,717) (54,610) (58,769) (28,561) 21,167
</TABLE>
22
<PAGE>
PRICE RANGE OF SHARES; DIVIDENDS
The Shares are traded on the Nasdaq National Market under the symbol "CCIL".
The following table sets forth, for each of the fiscal quarters indicated, the
high and low reported closing sales price per Share on the Nasdaq National
Market after giving effect to the 3-for-2 stock split by way of stock dividend
paid on April 4, 1998.
<TABLE>
<CAPTION>
COMMON STOCK
--------------------
<S> <C> <C>
HIGH LOW
--------- ---------
Fiscal Year Ended December 31, 1997
First Quarter................................................................................ $ 21.83 $ 17.83
Second Quarter............................................................................... 22.83 16.08
Third Quarter................................................................................ 27.67 21.67
Fourth Quarter............................................................................... 31.67 26.08
Fiscal Year Ended December 31, 1998
First Quarter................................................................................ $ 45.33 $ 30.58
Second Quarter............................................................................... 52.50 40.50
Third Quarter................................................................................ 62.50 49.94
Fourth Quarter............................................................................... 68.00 44.375
Fiscal Year Ending December 31, 1999
First Quarter (through March 2, 1999)........................................................ $ 80.56 $ 65.75
</TABLE>
On December 10, 1998, the last full trading day prior to the public
announcement of the execution of the Merger Agreement by the Company and
Kensington, the closing price for the Shares, as reported on the Nasdaq National
Market, was $62 per Share. The Merger Consideration represents an approximate
29% premium over the reported closing sale price on December 10, 1998. On March
2, 1999, the most recent date for which prices were available prior to printing
this Information Statement, the closing price of the Shares, as reported on the
Nasdaq National Market, was $78.50 per Share. Stockholders are urged to obtain a
current market quotation for the Shares.
The Company did not declare or pay any cash dividends during any of the
periods indicated in the above table. In addition, under the terms of the Merger
Agreement, the Company is not permitted to declare or pay dividends with respect
to the Shares without the prior written consent of Purchaser and Purchaser does
not intend to consent to any such declaration or payment.
23
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of March 1, 1999, by (i) each executive officer and
director of the Company, (ii) all current directors and executive officers of
the Company as a group, and (iii) each person who is known by the Company to
beneficially own 5% or more of Common Stock. Unless otherwise indicated in the
footnotes, Common Stock is owned directly, and the indicated person has sole
voting and investment power.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
-----------------------------------------------------
PRESENTLY PERCENTAGE
NAME OF EXERCISABLE BENEFICIALLY
BENEFICIAL OWNER COMPANY STOCK OPTIONS(1) TOTAL OWNED
- ------------------------------------------------------------ -------------- ----------- --------- -------------
<S> <C> <C> <C> <C>
William B. Ginsberg......................................... -- 720,724 720,724 3.88%
Richard J. Lubasch.......................................... -- 137,986 137,986 *
Stanton N. Williams......................................... -- 134,890 134,890 *
Marco DeBenedetti(2)........................................ -- -- -- --
Gregg Gorelick.............................................. -- 64,403 64,403 *
Alan J. Patricof............................................ -- 50,733 50,733 *
Dr. Frank Esser............................................. -- -- -- --
Dr. Kurt J. Kinzius......................................... -- -- -- --
Luciano La Noce............................................. -- -- -- --
All directors and executive officers as a group (8
persons).................................................. -- 1,108,736 1,108,736 5.84%
Kensington Acquisition Sub, Inc............................. 12,079,305 -- 12,079,305 67.60%
c/o Olivetti S.p.A.
Via Lorenteggio 257
20152 Milan, Italy and
c/o Mannesmann AG
Mannesmannufer 2
40213 Dusseldorf, Germany
Olivetti S.p.A.(3)..........................................
Via Lorenteggio 257
20152 Milan, Italy
Mannesmann AG(3)............................................
Mannesmannufer 2
40213 Dusseldorf, Germany
Massachusetts Financial Services Company(4)................. 1,938,040 -- 1,938,040 10.85%
MFS Series Trust VII--
MFS Capital Opportunities Fund
500 Boylston Street
Boston, MA 02116
Janus Capital Corporation(5)................................ 1,616,919 -- 1,616,919 9.05%
Thomas H. Bailey
Janus Worldwide Fund
100 Fillmore Street
Denver, CO 80206
FMR Corp.(6)................................................ 1,297,700 -- 1,297,700 7.28%
82 Devonshire Street
Boston, MA 02109
Fidelity International Limited(6)...........................
Pembroke Hall
42 Crow Lane
Hamilton, Bermuda
</TABLE>
- ------------------------
* Less than one percent
(1) Includes Common Stock purchasable upon the exercise of options which are
exercisable or become so in the next 60 days.
(2) CIR beneficially owns $3,000,000 aggregate principal amount of the
Convertible Notes issued by the Company. CIR is a majority owned subsidiary
of COFIDE. Mr. Marco De Benedetti is a member of
24
<PAGE>
the Board of Directors of COFIDE. The Convertible Notes owned by CIR are
convertible into 75,100 Shares, which represent approximately .41% of the
outstanding Shares, assuming conversion of all the Convertible Notes
beneficially owned by CIR. Mr. DeBenedetti disclaims "beneficial ownership,"
within the meaning of Rule 13d-3 under the Exchange Act, of the Shares owned
by CIR.
(3) Represents Common Stock held by the Purchaser.
(4) Based solely upon Schedule 13-G, Amendment No. 3, filed with the Commission
on February 11, 1999, by Massachusetts Financial Services Company ("MFS").
The 1,938,040 shares of Common Stock includes 1,263,417 shares of Common
Stock beneficially owned by MFS Series Trust VII--MFS Capital Opportunities
Fund and 674,623 shares of Common Stock beneficially owned by certain
non-reporting entities.
(5) Based solely upon Schedule 13-G, filed with the Commission on February 12,
1999, by Janus Capital Corporation.
(6) Based solely upon Schedule 13-D, Amendment No. 5, filed with the Securities
FMR Corp. and Schedule 13-D, Amendment No. 5, filed with the Commission on
December 11, 1998, by Fidelity International Limited. FMR Corp. and Fidelity
International Limited have each filed a Schedule 13-D in which they have
aggregated their holdings on a voluntary basis, although each has stated its
view that the two entities are not acting as a "group" for purposes of
Section 13(d) under the Exchange Act, and that they are not otherwise
required to attribute to each other the beneficial ownership of securities
beneficially owned by the other.
25
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other matters that may properly be, or
which are likely to be, brought before the Special Meeting.
ADDITIONAL INFORMATION
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is obligated to file reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Information as of particular dates
concerning the Company's directors and officers, their remuneration, options
granted to them, the principal holders of the Company's securities and any
material interests of such persons in transactions with the Company is required
to be disclosed in proxy statements distributed to the Stockholders and filed
with the Commission.
Such reports, proxy statements and other information should be available for
inspection at the public reference facilities of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at Seven World Trade Center, Suite 1300, New York, NY 10048
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661.
Copies of such information should be obtainable by mail, upon payment of the
Commission's customary charges, by writing to the Commission's principal office
at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains
a website on the internet at http://www.sec.gov that contains reports, proxy
statements and other information relating to the Company and Purchaser which
have been filed via the Commission's EDGAR System.
INDEPENDENT PUBLIC ACCOUNTANTS
The financial statements of the Company at and for the three years ended
December 31, 1997, incorporated into this Information Statement by reference to
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997, have been incorporated in reliance on the report of Ernst & Young LLP,
independent public accountants, also incorporated by reference herein. A
representative of Ernst & Young will NOT be at the Special Meeting.
26
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Exchange Act are incorporated herein by reference.
1. The Annual Report of the Company on Form 10-K for its fiscal year
ended December 31, 1997;
2. The Quarterly Report of the Company on Form 10-Q for the three month
period ended September 30, 1998; and
3. The Company's Current Reports on Form 8-K, dated December 11, 1998
(filed December 14, 1998), December 18, 1998 (filed December 18, 1998),
January 6, 1999 (filed January 8, 1999), January 19, 1999 (filed January 20,
1999) and February 2, 1999 (filed February 4, 1999).
In addition, all reports and other documents subsequently filed by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act prior to the date of the Special Meeting shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such reports and documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Information Statement to the extent that a statement
contained in this Information Statement modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed to constitute a
part of this Information Statement except as so modified or superseded.
The Company will provide, without charge, to each person who receives this
Information Statement, upon the written or oral request of such person, a copy
of such documents incorporated herein by reference (not including exhibits to
such information unless the exhibits themselves are specifically incorporated by
reference). Requests for documents should be made as specified above.
By Order of the Board of Directors
[SIGNATURE]
Marco De Benedetti
[SIGNATURE]
Dr. Kurt J. Kinzius
Co-Chairmen of the Board of Directors
Cellular Communications International,
Inc.
27
<PAGE>
EXHIBIT A
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
AND
KENSINGTON ACQUISITION SUB, INC.
----------------------------------------
AGREEMENT AND PLAN OF MERGER
----------------------------------------
DATED AS OF DECEMBER 11, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----------
<S> <C> <C>
ARTICLE I. THE TENDER OFFER
SECTION 1.1. The Offer............................................................................. 1
SECTION 1.2. Company Action........................................................................ 3
SECTION 1.3. Directors............................................................................. 4
ARTICLE II. THE MERGER
SECTION 2.1. The Merger............................................................................ 5
SECTION 2.2. Effective Time........................................................................ 5
SECTION 2.3. Closing............................................................................... 5
SECTION 2.4. Effect of the Merger.................................................................. 5
SECTION 2.5. Subsequent Actions.................................................................... 6
SECTION 2.6. Certificate of Incorporation; By-Laws; Directors and Officers......................... 6
SECTION 2.7. Stockholders' Meeting................................................................. 6
SECTION 2.8. Merger Without Meeting of Stockholders................................................ 7
SECTION 2.9. Conversion of Securities.............................................................. 7
SECTION 2.10. Dissenting Shares..................................................................... 7
SECTION 2.11. Surrender of Shares; Stock Transfer Books............................................. 8
SECTION 2.12. Stock Plans........................................................................... 9
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
SECTION 3.1. Corporate Organization................................................................ 9
SECTION 3.2. Authority Relative to this Agreement.................................................. 9
SECTION 3.3. No Conflict; Required Filings and Consents............................................ 10
SECTION 3.4. Financing Arrangements................................................................ 10
SECTION 3.5. No Prior Activities................................................................... 10
SECTION 3.6. Brokers............................................................................... 10
SECTION 3.7. Proxy Statement....................................................................... 10
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.1. Organization and Qualification; Subsidiaries.......................................... 11
SECTION 4.2. Capitalization........................................................................ 11
SECTION 4.3. Authority Relative to this Agreement; Company Action.................................. 12
SECTION 4.4. No Conflict; Required Filings and Consents............................................ 12
SECTION 4.5. SEC Filings; Financial Statements..................................................... 13
SECTION 4.6. Undisclosed Liabilities............................................................... 13
SECTION 4.7. Absence of Certain Changes or Events.................................................. 14
SECTION 4.8. Litigation............................................................................ 14
SECTION 4.9. Employee Benefit Plans................................................................ 14
SECTION 4.10. Proxy Statement....................................................................... 15
SECTION 4.11. Brokers............................................................................... 15
SECTION 4.12. Conduct of Business; Licenses and Permits............................................. 16
SECTION 4.13. Compliance with Law................................................................... 16
SECTION 4.14. Taxes................................................................................. 17
SECTION 4.15. Intellectual Property................................................................. 18
SECTION 4.16. Employment Matters.................................................................... 19
SECTION 4.17. Vote Required......................................................................... 20
SECTION 4.18. Environmental Matters................................................................. 20
SECTION 4.19. Real Property......................................................................... 20
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----------
<S> <C> <C>
SECTION 4.20. Title and Condition of Properties..................................................... 20
SECTION 4.21. Contracts............................................................................. 21
SECTION 4.22. Potential Conflicts of Interest....................................................... 21
SECTION 4.23. Insurance............................................................................. 21
SECTION 4.24. Opinion of Financial Advisor.......................................................... 21
SECTION 4.25. Investment Company.................................................................... 22
SECTION 4.26. Full Disclosure....................................................................... 22
ARTICLE V. CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1. Acquisition Proposals................................................................. 22
SECTION 5.2. Conduct of Business by the Company Pending the Merger................................. 22
SECTION 5.3. No Solicitation; Board Recommendation................................................. 24
ARTICLE VI. ADDITIONAL AGREEMENTS
SECTION 6.1. Proxy Statement....................................................................... 25
SECTION 6.2. Meeting of Stockholders of the Company................................................ 25
SECTION 6.3. Additional Agreements................................................................. 25
SECTION 6.4. Notification of Certain Matters....................................................... 26
SECTION 6.5. Access to Information................................................................. 26
SECTION 6.6. Public Announcements.................................................................. 26
SECTION 6.7. Best Efforts; Cooperation............................................................. 26
SECTION 6.8. Agreement to Defend and Indemnify..................................................... 27
SECTION 6.9. Debt Offer............................................................................ 27
SECTION 6.10. Qualified Electing Fund Documentation................................................. 28
SECTION 6.11. Omnitel Agreement..................................................................... 28
ARTICLE VII. CONDITIONS OF MERGER
SECTION 7.1. Offer................................................................................. 29
SECTION 7.2. Stockholder Approval.................................................................. 29
SECTION 7.3. No Challenge.......................................................................... 29
ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination........................................................................... 29
SECTION 8.2. Effect of Termination................................................................. 30
ARTICLE IX. GENERAL PROVISIONS
SECTION 9.1. Non-Survival of Representations, Warranties and Agreements............................ 31
SECTION 9.2. Notices............................................................................... 31
SECTION 9.3. Expenses.............................................................................. 32
SECTION 9.4. Certain Definitions................................................................... 32
SECTION 9.5. Headings.............................................................................. 32
SECTION 9.6. Severability.......................................................................... 32
SECTION 9.7. Entire Agreement; No Third-Party Beneficiaries........................................ 32
SECTION 9.8. Assignment............................................................................ 32
SECTION 9.9. Governing Law......................................................................... 33
SECTION 9.10. Amendment............................................................................. 33
SECTION 9.11. Waiver................................................................................ 33
SECTION 9.12. Counterparts.......................................................................... 33
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ANNEX I Conditions to the Offer
Exhibit A Option Agreement
Exhibit B Stockholders Agreement
SCHEDULES
Schedule 4.1 Equity Interests
Schedule 4.2 Capitalization
Schedule 4.4 No Conflict; Required Filings and Consents
Schedule 4.6 Liabilities
Schedule 4.7 Conduct of Business; Certain Changes or Events
Schedule 4.8 Litigation
Schedule 4.9 Employment Plans
Schedule 4.12 Licenses and Permits
Schedule 4.13 Compliance with Law
Schedule 4.14 Net Operating Loss and Credit
Schedule 4.15 Intellectual Property
Schedule 4.18 Environmental Matters
Schedule 4.21 Contracts
Schedule 4.22 Potential Conflicts of Interest
Schedule 5.2 Conduct of Business
Schedule 6.8 D & O Insurance
Schedule 6.9 Debt Offer
</TABLE>
iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 11, 1998 (the
"Agreement"), between Cellular Communications International, Inc., a Delaware
corporation (the "Company"), and Kensington Acquisition Sub, Inc., a Delaware
corporation (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Boards of Directors of each of the Company and the Purchaser
have determined that it is in the best interests of their respective
stockholders for the Purchaser to acquire the Company upon the terms and subject
to the conditions set forth herein; and
WHEREAS, in furtherance thereof, it is proposed that the Purchaser will make
a cash tender offer (the "Offer") to acquire all shares (the "Shares") of the
issued and outstanding common stock, par value $.01 per share, of the Company
("Company Common Stock"), including the associated Preferred Stock Purchase
Rights (the "Rights") issued pursuant to the Rights Agreement, dated as of
December 19, 1990, between the Company and Continental Stock Transfer Trust
Company (the "Rights Agreement"), for $65.75 per Share (the "Offer Price"), or
such higher price as may be paid in the Offer, in each case net to the seller in
cash;
WHEREAS, also in furtherance of such acquisition, the Boards of Directors of
the Company and the Purchaser have each approved the merger (the "Merger") of
the Purchaser with and into the Company following the Offer in accordance with
the General Corporation Law of the State of Delaware ("Delaware Law") and upon
the terms and subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company (the "Board of Directors")
has unanimously approved this Agreement and has resolved to recommend acceptance
of the Offer and the Merger to the holders of the Shares;
WHEREAS, as a condition and inducement to the Purchaser to enter into this
Agreement and to incur the obligations set forth herein, concurrently with the
execution and delivery of this Agreement, the Purchaser and the Company are
entering into an Option Agreement in the form of Exhibit A hereto (the "Option
Agreement"), pursuant to which, among other things, the Company has granted the
Purchaser an option to purchase certain newly-issued shares of Company Common
Stock subject to certain conditions; and
WHEREAS, as a condition and inducement to the Purchaser to enter into this
Agreement, the Board of Directors has approved the terms of a Stockholders
Agreement in the form of Exhibit B hereto (the "Stockholders Agreement") to be
entered into by the Purchaser, the Company, and the directors, officers and
certain stockholders of the Company concurrently with the execution of this
Agreement, pursuant to which each such Person (as defined below) has agreed to
vote its Shares for approval of the Merger and this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Company and the Purchaser hereby agree
as follows:
ARTICLE I.
THE TENDER OFFER
SECTION 1.1. The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1 hereof and none of the events set forth in Annex I
hereto shall have occurred and be existing, the Purchaser or a direct or
indirect subsidiary thereof shall commence (within the meaning of Rule 14d-2
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),) the
Offer as promptly as practicable, but in no event later than five business days
following the execution of this Agreement. The obligation of the Purchaser to
accept for payment any Shares tendered shall be subject to the satisfaction
<PAGE>
of only those conditions set forth in Annex I. The Purchaser expressly reserves
the right to waive any such condition or to increase the Offer Price. The Offer
Price shall be net to the seller in cash. The Company agrees that no Shares held
by the Company will be tendered pursuant to the Offer.
(b) Without the prior written consent of the Company, the Purchaser shall
not (i) decrease the Offer Price or change the form of consideration payable in
the Offer, (ii) decrease the number of Shares sought, (iii) amend or waive
satisfaction of the Minimum Condition (as defined in Annex I) or (iv) impose
additional conditions to the Offer or amend any other term of the Offer in any
manner adverse to the holders of Shares; provided, however, that if on the
initial scheduled expiration date of the Offer (the "Expiration Date") which
shall be twenty (20) business days after the date the Offer is commenced, all
conditions to the Offer shall not have been satisfied or waived, the Purchaser
may, from time to time, in its sole discretion, extend the expiration date (any
such extension to be for ten (10) business days or less); provided, however,
that the expiration date of the Offer may not be extended beyond May 15, 1999.
The Purchaser shall, on the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, accept for payment and purchase, as soon
as practicable after the expiration of the Offer, all Shares validly tendered
and not withdrawn prior to the expiration of the Offer; provided, however, that
the Purchaser may (i) extend the Expiration Date (including as it may be
extended) for up to ten (10) business days in connection with an increase in the
consideration to be paid pursuant to the Offer so as to comply with applicable
rules and regulations of the Securities and Exchange Commission (the "SEC"), and
(ii) if, immediately prior to the Expiration Date (as it may be extended), the
Shares tendered and not withdrawn pursuant to the Offer equal less than 90% of
the outstanding Shares, the Purchaser may extend the Offer for a period not to
exceed fifteen (15) business days, notwithstanding that all conditions to the
Offer are satisfied as of such Expiration Date; provided, however, that during
any such extension of the Offer, the Purchaser irrevocably waives all of the
conditions to the Offer set forth in Annex I (other than the Minimum Condition
(as defined in Annex I)). It is agreed that the conditions to the Offer set
forth in Annex I are for the benefit of the Purchaser and may be asserted by the
Purchaser regardless of the circumstances giving rise to any such condition or,
except with respect to the Minimum Condition, may be waived by the Purchaser, in
whole or in part at any time and from time to time, in its sole discretion.
(c) The Offer shall be made by means of an offer to purchase (the "Offer to
Purchase") having only the conditions set forth in Annex I hereto. On the date
the Offer is commenced, the Purchaser shall file with the SEC a Tender Offer
Statement on Schedule 14D-1 (together with all amendments and supplements
thereto, and including the exhibits thereto, the "Schedule 14D-1"). The Schedule
14D-1 will contain (including as an exhibit) or incorporate by reference the
Offer to Purchase and forms of the related letter of transmittal and summary
advertisement (which documents, together with any supplements or amendments
thereto, and any other SEC schedule or form which is filed in connection with
the Offer and related transactions, are referred to collectively herein as the
"Offer Documents"). The Offer Documents will comply in all material respects
with the provisions of applicable Federal securities laws and, on the date filed
with the SEC and on the date first published, mailed or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by the
Purchaser with respect to information furnished by the Company to the Purchaser,
in writing, expressly for inclusion in the Offer Documents. The information
supplied by the Company to the Purchaser, in writing, expressly for inclusion in
the Schedule 14D-1 will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
(d) The Purchaser agrees to take all steps necessary to cause the Schedule
14D-1 to be filed with the SEC and the Offer Documents to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
Federal securities laws. The Company and its counsel shall be given a reasonable
opportunity to review and comment on any Offer Documents before they are filed
with the SEC. Each of
2
<PAGE>
the Purchaser and the Company agrees promptly (i) to correct any information
provided by it for use in the Schedule 14D-1 or the Offer Documents if and to
the extent that such information shall have become false or misleading in any
material respect and (ii) to supplement the information provided by it
specifically for use in the Schedule 14D-1 or the Offer Documents to include any
information that shall become necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
Purchaser further agrees to take all steps necessary to cause the Schedule 14D-1
as so corrected to be filed with the SEC and to be disseminated to the Company's
stockholders, in each case as and to the extent required by applicable Federal
securities laws. In addition, the Purchaser agrees to provide the Company and
its counsel with any comments, whether written or oral, that the Purchaser or
its counsel may receive from time to time from the SEC or its staff with respect
to the Schedule 14D-1 promptly after the receipt of such comments.
(e) The Purchaser shall have available on a timely basis the funds necessary
to accept for payment, and pay for, any Shares that the Purchaser becomes
obligated to pay for pursuant to the Offer or pursuant to Article II hereof.
SECTION 1.2. Company Action.
(a) The Company hereby approves of and consents to the Offer and represents
and warrants that:
(i) the Board of Directors, at a meeting duly called and held on
December 10, 1998, at which a majority of the Directors were present: duly
and unanimously approved and adopted this Agreement, the Option Agreement,
the Stockholders Agreement and the transactions contemplated hereby and
thereby, including the Offer and the Merger, resolved to recommend that the
stockholders of the Company accept the Offer, tender their Shares pursuant
to the Offer and approve this Agreement and the transactions contemplated
hereby, including the Merger; and determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, are
fair to and in the best interests of the holders of Shares; provided,
however, that prior to the purchase by the Purchaser of Shares pursuant to
the Offer, the Company may modify, withdraw or change such recommendation to
the extent that the Board of Directors determines, after consultation with
outside legal counsel to the Company, that the failure to so withdraw,
modify or change such recommendation would likely breach the fiduciary
duties of the Board of Directors under applicable laws;
(ii) with respect to the Rights Agreement, the Company has duly amended
the Rights Agreement to provide that (A) neither this Agreement nor any of
the transactions contemplated hereby, including the Offer and the Merger,
will result in the occurrence of a "Distribution Date" (as such term is
defined in the Rights Agreement) or otherwise cause the Rights to become
exercisable by the holders thereof, and (B) the Rights shall automatically
on and as of the Effective Time (as defined below) be void and of no further
force or effect; and
(iii) Wasserstein Perella & Co., Inc. ("Wasserstein Perella") has
delivered to the Board of Directors its written opinion that as of the date
hereof the consideration to be received by the stockholders of the Company
pursuant to each of the Offer and the Merger is fair to the stockholders of
the Company from a financial point of view. The Company has been authorized
by Wasserstein Perella to permit the inclusion of such fairness opinion (or
a reference thereto) in the Offer Documents and in the Schedule 14D-9
referred to below. The Company hereby consents to the inclusion in the Offer
Documents of the recommendations of the Board of Directors described in this
Section 1.2(a).
(b) The Company shall file with the SEC, no later than the fifth business
day following the public announcement of this Agreement, a Tender Offer
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any and
all amendments or supplements thereto, and including the exhibits thereto, the
"Schedule 14D-9"). The Schedule 14D-9 will comply in all material respects with
the provisions of all applicable law, including Federal securities law and, on
the date filed with the SEC and on
3
<PAGE>
the date first published, sent or given to the Company's stockholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by the Company with respect to
information furnished by the Purchaser, in writing, expressly for inclusion in
the Schedule 14D-9. The Company further agrees to take all steps necessary to
cause the Schedule 14D-9 to be filed with the SEC and to be disseminated to
holders of the Shares, in each case as and to the extent required by applicable
Federal securities laws. The Company shall mail, or cause to be mailed, such
Schedule 14D-9 to the stockholders of the Company at the same time the Offer
Documents are first mailed to the stockholders of the Company together with such
Offer Documents. The Schedule 14D-9 and the Offer Documents shall contain the
recommendations of the Board of Directors described in Section 1.2(a) hereof.
The Company agrees promptly to correct the Schedule 14D-9 if and to the extent
that it shall have become false or misleading in any material respect (and the
Purchaser, with respect to written information supplied by it specifically for
use in the Schedule 14D-9, shall promptly notify the Company of any required
corrections of such information and cooperate with the Company with respect to
correcting such information) and to supplement the information contained in the
Schedule 14D-9 to include any information that shall become necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The Company further agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC
and to be disseminated to the stockholders of the Company, in each case as and
to the extent required by applicable law, including Federal securities laws. The
Purchaser and its counsel shall be given a reasonable opportunity to review and
comment on the Schedule 14D-9 before it is filed with the SEC. In addition, the
Company agrees to provide the Purchaser and its counsel with any comments,
whether written or oral, that the Company or its counsel may receive from time
to time from the SEC or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments.
(c) In connection with the Offer, the Company, promptly upon execution of
this Agreement, shall furnish or cause to be furnished to the Purchaser mailing
labels containing the names and addresses of all record holders of Shares,
non-objecting beneficial owner lists and security position listings of Shares
held in stock depositories, each as of a recent date, and shall promptly furnish
the Purchaser with such additional information (including, but not limited to,
updated lists and computer files containing the names of stockholders and their
addresses, mailing labels and security position listings) and such other
information and assistance as the Purchaser or its agents may reasonably request
for the purpose of communicating the Offer to the record and beneficial holders
of Shares.
SECTION 1.3. Directors.
(a) Promptly upon the purchase by the Purchaser of any Shares pursuant to
the Offer, and from time to time thereafter as Shares are acquired by the
Purchaser, the Purchaser shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors as
will give the Purchaser, subject to compliance with Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder, representation on the Board
of Directors equal to at least that number of directors which equals the product
of the total number of directors on the Board of Directors (giving effect to the
directors appointed or elected pursuant to this sentence and including current
directors serving as officers of the Company) multiplied by the percentage that
the aggregate number of Shares beneficially owned by the Purchaser or any
affiliate of the Purchaser (including for purposes of this Section 1.3 such
Shares as are accepted for payment pursuant to the Offer, but excluding Shares
held by the Company and excluding Shares beneficially owned by the Purchaser by
virtue of the Option Agreement) bears to the number of Shares outstanding. At
such times, the Company will also cause each committee of the Board of Directors
to include Persons designated by the Purchaser constituting at least the same
percentage of each such committee or board as the Purchaser's designees are of
the Board of Directors. The Company shall, upon request by the Purchaser,
promptly increase the size of the Board of Directors or exercise its best
efforts to secure the resignations of such number of incumbent directors as is
necessary to enable the Purchaser's
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designees to be elected to the Board of Directors in accordance with the terms
of this Section 1.3 and shall cause the Purchaser's designees to be so elected;
provided, however, that, in the event that the Purchaser's designees are
appointed or elected to the Board of Directors, until the Effective Time (as
defined below) the Board of Directors shall have at least one director who is a
director on the date hereof and who is neither an officer of the Company nor a
designee, stockholder, affiliate or associate (within the meaning of the Federal
securities laws) of the Purchaser (one or more of such directors, the
"Independent Directors"); provided, further, that if no Independent Directors
remain, the other directors shall designate one Person to fill one of the
vacancies who shall not be either an officer of the Company or a designee,
stockholder, affiliate or associate of the Purchaser, and such Person shall be
deemed to be an Independent Director for purposes of this Agreement.
(b) Subject to applicable law, the Company shall promptly take all action
necessary pursuant to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder in order to fulfill its obligations under this Section
1.3 and shall include in the Schedule 14D-9 mailed to stockholders promptly
after the commencement of the Offer (or an amendment thereof or an information
statement pursuant to Rule 14f-1 if the Purchaser has not theretofore designated
directors) such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 in order to fulfill
its obligations under this Section 1.3. The Purchaser will supply the Company
and be solely responsible for any information with respect to itself and its
nominees, officers, directors and affiliates required by Section 14(f) and Rule
14f-1. Notwithstanding anything in this Agreement to the contrary, in the event
that the Purchaser's designees are elected to the Board of Directors, after the
acceptance for payment and purchase of Shares pursuant to the Offer and prior to
the Effective Time, the affirmative vote of a majority of the Independent
Directors shall be required to (i) amend or terminate this Agreement on behalf
of the Company, (ii) exercise or waive any of the Company's rights or remedies
hereunder, (iii) extend the time for performance of the Purchaser's obligations
hereunder or (iv) take any other action by the Company in connection with this
Agreement required to be taken by the Board of Directors.
ARTICLE II.
THE MERGER
SECTION 2.1. The Merger. At the Effective Time and subject to and upon the
terms and conditions of this Agreement and Delaware Law, the Purchaser shall be
merged with and into the Company, the separate corporate existence of the
Purchaser shall cease and the Company shall continue as the surviving
corporation. The Company as the surviving corporation after the Merger
hereinafter sometimes is referred to as the "Surviving Corporation."
SECTION 2.2. Effective Time. The parties hereto shall cause a Certificate
of Merger to be executed and filed on the Closing Date (as defined below) (or on
such other date as the Purchaser and the Company may agree) with the Secretary
of State of the State of Delaware, in such form as required by, and executed in
accordance with the relevant provisions of, Delaware Law. The Merger shall
become effective on the date on which the Certificate of Merger is duly filed
with the Secretary of State of the State of Delaware or such time as is agreed
upon by the parties and specified in the Certificate of Merger, and such time is
hereinafter referred to as the "Effective Time."
SECTION 2.3. Closing. The closing of the Merger (the "Closing") shall take
place at 10:00 a.m. on a date to be specified by the parties, which shall be no
later than the third business day after satisfaction or waiver of all of the
conditions set forth in Article VII hereof (the "Closing Date"), at the offices
of Willkie Farr & Gallagher, 787 Seventh Avenue, New York, New York, unless
another date or place is agreed to in writing by the parties hereto.
SECTION 2.4. Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing,
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and subject thereto, at the Effective Time all the property, rights, privileges,
powers and franchises of the Company and the Purchaser shall vest in the
Surviving Corporation, and all debts, liabilities and duties of the Company and
the Purchaser shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 2.5. Subsequent Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
businesses, properties or assets of either of the Company or the Purchaser
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger or otherwise to carry out this Agreement, the
officers and directors of the Surviving Corporation shall be authorized to
execute and deliver, in the name and on behalf of either the Company or the
Purchaser, all such deeds, bills of sale, assignments and assurances and to take
and do, in the name and on behalf of each of such corporations or otherwise, all
such other actions and things as may be necessary or desirable to vest, perfect
or confirm any and all right, title and interest in, to and under such rights,
businesses, properties or assets in the Surviving Corporation or otherwise to
carry out this Agreement.
SECTION 2.6. Certificate of Incorporation; By-Laws; Directors and Officers.
(a) Unless otherwise determined by the Purchaser before the Effective Time,
at the Effective Time the Certificate of Incorporation of the Purchaser, as in
effect immediately before the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation.
(b) The By-Laws of the Purchaser, as in effect immediately before the
Effective Time, shall be the By-Laws of the Surviving Corporation until
thereafter amended as provided by law, the Certificate of Incorporation of the
Surviving Corporation and such By-Laws.
(c) The directors of the Purchaser immediately before the Effective Time
will be the initial directors of the Surviving Corporation, and the officers of
the Company immediately before the Effective Time will be the initial officers
of the Surviving Corporation, in each case until their successors are elected or
appointed and qualified. If, at the Effective Time, a vacancy shall exist on the
Board of Directors or in any office of the Surviving Corporation, such vacancy
may thereafter be filled in the manner provided by law.
SECTION 2.7. Stockholders' Meeting.
(a) If required by applicable law in order to consummate the Merger, the
Company, acting through its Board of Directors, shall, in accordance with
applicable law:
(i) duly call, give notice of, convene and hold a special meeting of its
stockholders (the "Special Meeting") as promptly as practicable following
the acceptance for payment and purchase of Shares by the Purchaser pursuant
to the Offer for the purpose of considering and taking action upon the
approval of the Merger and the adoption of this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or information
statement relating to the Merger and this Agreement and use its best efforts
(x) to obtain and furnish the information required to be included by the SEC
in the Proxy Statement (as defined below) and, after consultation with the
Purchaser, to respond promptly to any comments made by the SEC with respect
to the preliminary proxy or information statement and cause a definitive
proxy or information statement, including any amendment or supplement
thereto (the "Proxy Statement"), to be mailed to its stockholders, provided
that no amendment or supplement to the Proxy Statement will be made by the
Company without consultation with the Purchaser and its counsel and (y) to
obtain the necessary approvals of the Merger and this Agreement by its
stockholders; and
(iii) notwithstanding the provisions of Section 2.7(a)(ii)(y), unless
the Board of Directors, after consultation with outside legal counsel to the
Company, determines that to do so would likely breach
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the fiduciary duties of the Board of Directors under applicable law, include
in the Proxy Statement the recommendation of the Board of Directors that
stockholders of the Company vote in favor of the approval of the Merger and
the adoption of this Agreement.
(b) The Purchaser shall vote, or cause to be voted, all of the Shares then
owned by it or any of its subsidiaries and affiliates in favor of the approval
of the Merger and the adoption of this Agreement.
SECTION 2.8. Merger Without Meeting of Stockholders. Notwithstanding
Section 2.7 hereof, in the event that the Purchaser or any subsidiary of the
Purchaser shall acquire at least 90% of the outstanding Shares, pursuant to the
Offer or otherwise, the parties hereto shall, at the request of the Purchaser
and subject to Article VII hereof, take all necessary and appropriate action to
cause the Merger to become effective as soon as practicable after such
acquisition, without a meeting of stockholders of the Company, in accordance
with Section 253 of Delaware Law.
SECTION 2.9. Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of the Purchaser, the Company or
the holder of any of the following securities:
(a) Each Share issued and outstanding immediately before the Effective Time
(other than any Shares to be cancelled pursuant to Section 2.9(b) and any
Dissenting Shares (as defined in Section 2.10(a)) shall be cancelled and
extinguished and be converted into the right to receive the Offer Price in cash
payable to the holder thereof, without interest (the "Merger Consideration"),
upon surrender of the certificate formerly representing such Share in the manner
provided in Section 2.11 hereof. All such Shares, when so converted, shall no
longer be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of a certificate representing any such Shares
shall cease to have any rights with respect thereto, except the right to receive
the Merger Consideration therefor upon the surrender of such certificate in
accordance with Section 2.11 hereof, without interest.
(b) Each Share held in the treasury of the Company and each Share owned by
the Purchaser or any direct or indirect wholly owned subsidiary of the Purchaser
immediately before the Effective Time shall be cancelled and extinguished and no
payment or other consideration shall be made with respect thereto.
(c) Each share of common stock, par value $.01 per share, of the Purchaser
issued and outstanding immediately before the Effective Time shall thereafter
represent one validly issued, fully paid and nonassessable share of common
stock, par value $.01 per share, of the Surviving Corporation.
SECTION 2.10. Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the contrary, any
Shares held by a holder who has demanded and perfected his demand for appraisal
of his Shares in accordance with Delaware Law (including but not limited to
Section 262 thereof) and as of the Effective Time has neither effectively
withdrawn nor lost his right to such appraisal ("Dissenting Shares"), shall not
be converted into or represent the right to receive the Merger Consideration
pursuant to Section 2.9, but the holder thereof shall be entitled to only such
rights as are granted by Delaware Law.
(b) Notwithstanding the provisions of Section 2.7(a), if any holder of
Shares who demands appraisal of his Shares under Delaware Law shall effectively
withdraw or lose (through failure to perfect or otherwise) his right to
appraisal, then as of the Effective Time or the occurrence of such event,
whichever later occurs, such holder's Shares shall automatically be converted
into and represent only the right to receive the Merger Consideration as
provided in Section 2.9(a), without interest thereon, upon surrender of the
certificate or certificates representing such Shares pursuant to Section 2.11
hereof.
(c) The Company shall give the Purchaser (i) prompt notice of any written
demands for appraisal or payment of the fair value of any Shares, withdrawals of
such demands, and any other instruments served pursuant to Delaware Law received
by the Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under Delaware Law. The
Company shall not voluntarily make any payment with respect to any demands for
appraisal and shall not, except with the prior written consent of the Purchaser,
settle or offer to settle any such demands.
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SECTION 2.11. Surrender of Shares; Stock Transfer Books.
(a) Before the Effective Time, the Purchaser shall designate a bank or trust
company reasonably acceptable to the Company to act as agent for the holders of
Shares in connection with the Merger (the "Exchange Agent") to receive the funds
necessary to make the payments contemplated by Section 2.9. At the Effective
Time, the Purchaser shall deposit, or cause to be deposited, in trust with the
Exchange Agent for the benefit of holders of Shares the aggregate consideration
to which such holders shall be entitled at the Effective Time pursuant to
Section 2.9.
(b) Each holder of certificates representing any Shares cancelled upon the
Merger, which immediately prior to the Effective Time represented outstanding
Shares (the "Certificates") whose Shares were converted pursuant to Section
2.9(a), may thereafter surrender such Certificate or Certificates to the
Exchange Agent, as agent for such holder, to effect the surrender of such
Certificate or Certificates on such holder's behalf for a period ending one year
after the Effective Time. The Purchaser agrees that promptly after the Effective
Time it shall cause the distribution to holders of record of Shares as of the
Effective Time of appropriate materials to facilitate such surrender. Upon the
surrender of Certificates, the Purchaser shall cause the Exchange Agent to pay
the holder of such Certificates in exchange therefor cash in an amount equal to
the Merger Consideration multiplied by the number of Shares represented by such
Certificate. Until so surrendered, each Certificate (other than Certificates
representing Dissenting Shares and Certificates representing Shares held by the
Purchaser or any direct or indirect wholly owned subsidiary of the Purchaser or
in the treasury of the Company) shall represent solely the right to receive the
aggregate Merger Consideration relating thereto.
(c) If payment of the Merger Consideration in respect of cancelled Shares is
to be made to a Person other than the Person in whose name a surrendered
Certificate or instrument is registered, it shall be a condition to such payment
that the Certificate or instrument so surrendered shall be properly endorsed or
shall be otherwise in proper form for transfer and that the Person requesting
such payment shall have paid any transfer and other taxes required by reason of
such payment in a name other than that of the registered holder of the
Certificate or instrument surrendered or shall have established to the
satisfaction of the Purchaser or the Exchange Agent that such tax either has
been paid or is not applicable.
(d) At the Effective Time, the stock transfer books of the Company shall be
closed and there shall not be any further registration of transfers of Shares or
any shares of capital stock thereafter on the records of the Company. From and
after the Effective Time, the holders of certificates evidencing ownership of
the Shares outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such Shares, except as otherwise provided for
herein or by applicable law. If, after the Effective Time, Certificates are
presented to the Surviving Corporation, they shall be cancelled and exchanged
for the Merger Consideration as provided in this Article II. No interest shall
accrue or be paid on any cash payable upon the surrender of a Certificate or
Certificates which immediately before the Effective Time represented outstanding
Shares.
(e) Promptly following the date which is one year after the Effective Time,
the Surviving Corporation shall be entitled to require the Exchange Agent to
deliver to it any cash (including any interest received with respect thereto),
Certificates and other documents in its possession relating to the transactions
contemplated hereby, which had been made available to the Exchange Agent and
which have not been disbursed to holders of Certificates, and thereafter such
holders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat or similar laws) only as general creditors thereof
with respect to the Merger Consideration payable upon due surrender of their
Certificates, without any interest thereon. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Exchange Agent shall be liable to any
holder of a Certificate for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
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(f) The Merger Consideration paid in the Merger shall be net to the holder
of Shares in cash, subject to reduction only for any applicable Federal backup
withholding or, as set forth in Section 2.8(c), stock transfer taxes payable by
such holder.
SECTION 2.12. Stock Plans.
(a) The Company shall take all actions necessary to provide that, at the
Effective Time, (i) each then outstanding option to purchase shares of Company
Common Stock (the "Options") granted under any of the Company's stock option
plans referred to in Section 4.2 hereof, each as amended (collectively, the
"Option Plans"), whether or not then exercisable or vested, shall be cancelled
and (ii) in consideration of such cancellation, such holders of Options shall
receive for each Share subject to such Option an amount (subject to any
applicable withholding tax) in cash equal to the product of (A) the excess, if
any, of the Offer Price over the per share exercise price of such Option and (B)
the number of Shares subject to such Option (such amount being herein referred
to as the "Option Price"); provided, however, that the Company shall obtain all
necessary consents or releases from holders of Options to effect the foregoing.
Upon receipt of the Option Price, the Option shall be cancelled. The surrender
of an Option to the Company shall be deemed a release of any and all rights the
holder had or may have had in respect of such Option. As promptly as practicable
following the consummation of the Merger, the Purchaser shall provide the
Company with the funds necessary to satisfy its obligations under this Section
2.12(a).
(b) Except as provided herein or as otherwise agreed to by the parties and
to the extent permitted by the Option Plans, (i) the Company shall cause the
Option Plans to terminate as of the Effective Time and shall provide for the
payment of any benefit due under such Option Plans in cash; (ii) the Company
shall cause the provisions in any other plan, program or arrangement, which
currently provides or previously provided for the issuance or grant by the
Company of any interest in respect of the capital stock of the Company, or for
payments based on the value of the capital stock of the Company (each such other
plan being referred to as an "Other Stock Plan") to terminate as of the
Effective Time and shall provide for the payment of any benefit due under such
plans in cash; and (iii) the Company shall take all action necessary to ensure
that following the Effective Time no holder of Options or any participant in the
Option Plans or in any Other Stock Plan shall have any right thereunder to
acquire any equity securities of the Company, the Surviving Corporation or any
subsidiary thereof, and to terminate all such plans. The Purchaser shall assure
that the Company has the funds necessary to meet its obligations under this
Section 2.12(b).
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as follows:
SECTION 3.1. Corporate Organization. The Purchaser is a corporation duly
organized under the laws of the State of Delaware. The Purchaser has the
requisite corporate power and authority and any necessary governmental approvals
to own, operate or lease the properties that it purports to own, operate or
lease and to carry on its business as it is now being conducted, except where
the failure to be so organized, existing and in good standing or to have such
power, authority, and governmental approvals would not have, individually or in
the aggregate, a material adverse effect on the Purchaser or on the ability of
the Purchaser to consummate any of the transactions contemplated by this
Agreement or to perform its obligations under this Agreement.
SECTION 3.2. Authority Relative to this Agreement. The execution and
delivery of this Agreement by the Purchaser and the consummation by the
Purchaser of the Merger and the transactions contemplated hereby and thereby
have been duly authorized by all necessary action on the part of the Purchaser
and no other proceeding is necessary for the execution and delivery of this
Agreement by the Purchaser, the performance by the Purchaser of its obligations
hereunder and the consummation by the Purchaser of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the
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Purchaser and, assuming due and valid authorization, execution and delivery
hereof by the Company, constitutes a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms.
SECTION 3.3. No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Purchaser do not,
and the performance of this Agreement by the Purchaser will not, (i) conflict
with or violate any law, regulation, court order, judgment or decree applicable
to the Purchaser or by which any of its property is bound or affected, (ii)
violate or conflict with the Certificate of Incorporation or By-Laws of the
Purchaser, or (iii) result in a violation or breach of or constitute a default
under (with or without due notice or lapse of time, or both), or give to others
any rights of termination or cancellation of, or result in the creation of a
Lien on any of the property or assets of the Purchaser pursuant to, any
contract, instrument, permit, license or franchise to which the Purchaser is a
party or by which the Purchaser or any of its property is bound or affected.
(b) Except for applicable requirements, if any, of the Exchange Act, the
pre-merger notification requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and filing and recordation
of appropriate merger documents as required by Delaware Law, the Purchaser is
not required to submit any notice, report or other filing with any court,
arbitrable tribunal, administrative agency or commission or other governmental
or other regulatory authority or agency, domestic or foreign (a "Governmental
Authority"), in connection with the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby. No
waiver, consent, approval or authorization of any Governmental Authority is
required to be obtained or made by the Purchaser in connection with its
execution, delivery or performance of this Agreement.
SECTION 3.4. Financing Arrangements. At the Expiration Date, the Purchaser
will have funds available to it sufficient to purchase the Shares in accordance
with the terms of this Agreement.
SECTION 3.5. No Prior Activities. Except for obligations or liabilities
incurred in connection with its incorporation or organization or the negotiation
and consummation of this Agreement and the transactions contemplated hereby, the
Purchaser has not incurred any obligations or liabilities, and has not engaged
in any business or activities of any type or kind whatsoever, or entered into
any agreements or arrangements with any Person or entity.
SECTION 3.6. Brokers. Except as to Goldman, Sachs & Co., no broker, finder
or investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by and on behalf of the Purchaser.
SECTION 3.7. Proxy Statement. None of the information supplied by the
Purchaser, the stockholders of the Purchaser or their respective officers,
directors, representatives, agents or employees (the "Purchaser Information"),
in writing, expressly for inclusion in the Proxy Statement, if any, or in any
amendments thereof or supplements thereto, will, on the date the Proxy Statement
is mailed to stockholders and at the time of the meeting of stockholders, if
any, to be held in connection with the Merger, contain any untrue statement of a
material fact or contain or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. Notwithstanding the
foregoing, the Purchaser does not make any representation or warranty with
respect to any information that has been supplied by the Company or its
accountants, counsel or other authorized representatives for use in any of the
foregoing documents.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Disclosure Schedule delivered to the Purchaser
prior to the execution of this Agreement (the "Disclosure Schedule"), the
Company hereby represents and warrants to the Purchaser as follows:
SECTION 4.1. Organization and Qualification; Subsidiaries. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority and
any necessary governmental approvals to own, operate or lease the properties
that it purports to own, operate or lease and to carry on its business as it is
now being conducted, and is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned, operated or leased or the nature of its activities makes
such qualification necessary, except for such failure which, when taken together
with all other such failures, would not have a Material Adverse Effect (as
defined below). Except as disclosed on Schedule 4.1 of the Disclosure Schedule,
the Company does not own any Subsidiaries and does not otherwise have an equity
interest in any other Person. The Subsidiaries listed on Schedule 4.1 do not
have any assets, obligations or liabilities of any type or kind and will be
dissolved prior to December 31, 1998. The term "Subsidiary" means any
corporation or other legal entity of which the Company (either alone or through
or together with any other Subsidiary) owns, directly or indirectly, more than
50% of the capital stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity. The term "Material
Adverse Effect" means any change in or effect on the business of the Company
that is not a result of the business operations of Omnitel (as defined below) or
of general changes in the economy or the industries in which the Company
operates or results from regulatory changes generally applicable to cellular
operators in Europe or Italy (including, without limitation, the issuance of a
fourth Italian cellular license or rules with respect to interconnections or
pricing for incoming calls) or a result of this Agreement that is or could
reasonably be expected to be materially adverse to (x) the business, operations,
properties (including intangible properties), condition (financial or
otherwise), results of operations, assets, liabilities, regulatory status or
prospects of the Company or (y) the ability of the Company to consummate any
transactions contemplated by this Agreement or the Option Agreement or to
perform its obligations under this Agreement or the Option Agreement.
SECTION 4.2. Capitalization. The authorized capital stock of the Company
consists of 75,000,000 shares of Company Common Stock and 2,500,000 shares of
Preferred Stock, $.01 par value per share ("Company Preferred Stock"), 1,000,000
shares of which have been designated "Series A Preferred Stock". As of November
30, 1998, (i) 16,715,306 shares of Company Common Stock and no shares of Company
Preferred Stock were issued and outstanding, (ii) 2,274,140 shares of Company
Common Stock were reserved for issuance in connection with the exercise of
outstanding options under the Option Plans, (iii) 651,091 shares of Company
Common Stock were reserved for issuance in connection with the exercise of
currently outstanding warrants ("Warrants") and (iv) 2,159,129 shares of Company
Common Stock were reserved for issuance in connection with the conversion of
currently outstanding Voting Debt (as defined below). All of the issued and
outstanding shares of the Company's capital stock are, and all Shares which may
be issued pursuant to the exercise or conversion of outstanding Options,
Warrants and Voting Debt will be, when issued in accordance with the respective
terms thereof, duly authorized, validly issued, fully paid and nonassessable and
free of preemptive or similar rights. Except as disclosed on Schedule 4.2 of the
Disclosure Schedule, there are no bonds, debentures, notes or other indebtedness
having general voting rights (or convertible into securities having such rights)
("Voting Debt") of the Company issued and outstanding. There are no voting
trusts or other agreements or understandings to which the Company is a party
with respect to the voting of the capital stock of the Company. Except as
disclosed on Schedule 4.2 of the Disclosure Schedule, as of the date hereof
there are no, and as of the Expiration Date there will be no,
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other options, warrants, puts, calls, preemptive rights, subscriptions or other
rights, agreements, arrangements or commitments of any character relating to the
issued, unissued or treasury shares of the capital stock or any other interest
in the ownership or earnings of the Company or other security of the Company
obligating the Company to issue or sell any shares of capital stock or Voting
Debt of, or other equity interests in, the Company. Except as disclosed on
Schedule 4.2 of the Disclosure Schedule, there are no outstanding contractual
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of the Company or to provide funds
to or make any investment (in the form of a loan, capital contribution or
otherwise) in any other entity.
SECTION 4.3. Authority Relative to this Agreement; Company Action.
(a) The Company has the necessary corporate power and authority to enter
into this Agreement, the Option Agreement and the Stockholders Agreement and,
subject to obtaining any necessary stockholder approval of the Merger, to carry
out its obligations hereunder and thereunder. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated by this Agreement, the Option Agreement and the Stockholders
Agreement have been duly authorized by all necessary corporate action on the
part of the Company, subject to the approval, if necessary, of the Merger by the
Company's stockholders in accordance with Delaware Law. Each of this Agreement,
the Option Agreement and the Stockholders Agreement has been duly executed and
delivered by the Company and, assuming due and valid authorization, execution
and delivery hereof and thereof by the other parties hereto and thereto, each of
this Agreement and the Stockholders Agreement constitutes a legal, valid and
binding obligation of the Company, enforceable against it in accordance with its
terms.
(b) The Company has taken all action which may be necessary under the Rights
Agreement, so that (i) the execution of this Agreement, the Option Agreement and
the Stockholders Agreement and any amendments hereto and thereto by the parties
hereto and thereto and the consummation of the transactions contemplated hereby
and thereby shall not cause (A) the Purchaser to become an Acquiring Person (as
defined in the Rights Agreement) or (B) a Distribution Date, a Stock Acquisition
Date or a Triggering Event (as such terms are defined in the Rights Agreement)
to occur, irrespective of the number of Shares acquired pursuant to the Offer or
exercise of the option granted under the Option Agreement, and (ii) the Rights
(as defined in the Rights Agreement) shall expire upon the acceptance of Shares
for payment pursuant to the Offer.
(c) The Board of Directors has approved this Agreement, the Option
Agreement, the Stockholders Agreement and the transactions contemplated hereby
and thereby (including but not limited to the Offer, the Merger and the matters
provided for in the Option Agreement) so as to render inapplicable hereto and
thereto the limitation on business combinations contained in (i) Section 203 of
Delaware Law (or any similar provision) and (ii) Article Ninth of the Restated
Certificate of Incorporation of the Company. As a result, the only vote of
holders of any class or series of the capital stock of the Company required to
adopt this Agreement and the transactions contemplated hereby, including the
Merger, is the affirmative vote of a majority of the outstanding Shares, and if
Section 253 of Delaware Law is applicable to the Merger, no such vote will be
required. Neither Section 203 of Delaware Law nor any other state takeover or
control share statute or similar statute or regulation applies or purports to
apply to the Offer, the Merger or any of the transactions contemplated hereby or
thereby.
SECTION 4.4. No Conflict; Required Filings and Consents.
(a) Except as disclosed on Schedule 4.4 of the Disclosure Schedule, to the
Company's knowledge, the execution and delivery of this Agreement, the Option
Agreement and the Stockholders Agreement by the Company do not, and the
performance of this Agreement, the Option Agreement and the Stockholders
Agreement by the Company will not, (i) conflict with or violate any law, order,
writ, injunction, decree, statute, rule or regulation, court order or judgment
applicable to the Company or by which its property is bound or affected, (ii)
violate or conflict with the Restated Certificate of Incorporation or By-Laws of
the Company, or (iii) result in a violation or breach of, constitute a default
under (with or without due notice
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or lapse of time or both), give to others any rights of termination or
cancellation of, or result in the creation of a Lien on any of the properties or
assets of the Company pursuant to, any contract, instrument, permit, license or
franchise to which the Company is a party or by which the Company or its
property is bound or affected, excluding from the foregoing clauses (i) and
(iii) such violations, breaches or defaults which, in the aggregate, would not
have a Material Adverse Effect. For purposes of this Agreement, "to the
knowledge of the Company" or "to the Company's knowledge" shall be limited to
the knowledge of a current director or officer of the Company.
(b) Except for applicable requirements of the Exchange Act, the pre-merger
notification requirements of the HSR Act, and the filing and recordation of
appropriate merger or other documents as required by Delaware Law, or "blue sky"
laws of various states, the Company is not required to submit any notice,
report, permit, authorization or other filing with any Governmental Authority in
connection with the execution, delivery or performance of this Agreement. No
waiver, consent, approval or authorization of any Governmental Authority is
required to be obtained or made by the Company in connection with its execution,
delivery or performance of this Agreement, the Option Agreement or the
Stockholders Agreement.
SECTION 4.5. SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports and documents required to be
filed with the SEC since January 1, 1997 (as such documents have been amended
since the time of their filing, collectively, the "SEC Reports"). As of their
respective dates, or, if amended, as of the date of the last such amendment, the
SEC Reports, including without limitation, any financial statements or schedules
included therein (i) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act of 1933, as amended (the
"Securities Act"), as the case may be, and the applicable rules and regulations
of the SEC promulgated thereunder, and (ii) did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The Company has
heretofore furnished or made available to the Purchaser a complete and correct
copy of any amendments or modifications which have not yet been filed with the
SEC to executed agreements, documents or other instruments which previously had
been filed by the Company with the SEC pursuant to the Securities Act or the
Exchange Act.
(b) The consolidated financial statements of the Company contained in the
SEC Reports (the "Financial Statements") have been prepared from, and are in
accordance with the books and records of the Company, comply in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and fairly presented the consolidated financial
position of the Company and the consolidated results of operation, cash flows
and changes in financial position of the Company as of and for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments.
SECTION 4.6. Undisclosed Liabilities.
(a) Except (a) as disclosed in the Financial Statements and (b) for
liabilities and obligations (i) incurred in the ordinary course of business and
consistent with past practice since September 30, 1998, (ii) pursuant to the
terms of this Agreement, or (iii) as disclosed on Schedule 4.6 of the Disclosure
Schedule, the Company has no material liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, that would be required by GAAP
to be reflected in, reserved against or otherwise described in the balance sheet
of the Company included in the Financial Statements (including the notes
thereto) or which would have a Material Adverse Effect.
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SECTION 4.7. Absence of Certain Changes or Events.
Since December 31, 1997, except as disclosed on Schedule 4.7 of the
Disclosure Schedule or in the SEC Reports filed prior to the date hereof, the
Company has conducted its business only in the ordinary and usual course in
accordance with past practice, and:
(a) there have not occurred any events or changes (including the incurrence
of any liabilities of any nature, whether or not accrued, contingent or
otherwise) that have had, or are reasonably likely in the future to have,
individually or in the aggregate, a Material Adverse Effect; and
(b) the Company has not taken any action which would have been prohibited
under Section 5.2 hereof.
SECTION 4.8. Litigation. Except as disclosed in the SEC Reports filed prior
to the date hereof, or as disclosed on Schedule 4.8 of the Disclosure Schedule,
there are no claims, actions, suits, proceedings (including, without limitation,
arbitration proceedings) or other alternative dispute resolution proceedings, or
investigations pending or, to the knowledge of the Company, threatened against
the Company, or any properties or rights of the Company, before any Governmental
Authority that, either individually or in the aggregate, would be reasonably
likely to have a Material Adverse Effect or prevent or delay the consummation of
the Offer or the Merger. As of the date hereof, the Company is not subject to
any outstanding court order, judgment, injunction or decree.
SECTION 4.9. Employee Benefit Plans.
(a) Schedule 4.9(a) of the Disclosure Schedule sets forth: (i) all "employee
benefit plans", as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and all other material employee
benefit arrangements or payroll practices, including, without limitation, any
such arrangements or payroll practices providing severance pay, sick leave,
vacation pay, salary continuation for disability, retirement benefits, deferred
compensation, bonus pay, incentive pay, stock options, hospitalization
insurance, medical insurance, life insurance, scholarships or tuition
reimbursements, maintained by the Company or to which the Company is obligated
to contribute thereunder for current or former employees or directors of the
Company (the "Employee Benefit Plans"). Neither the Company nor any trade or
business (whether or not incorporated) which is or has ever been under control
or treated as a single employer with the Company under Section 414(b), (c), (m),
or (o) of the Internal Revenue Code of 1986, as amended (the "Code") ("ERISA
Affiliate") has ever maintained, contributed to or been obligated to contribute
to an "employee pension plan", as defined in Section 3(2) of ERISA.
(b) All contributions (including all employer contributions and employee
salary reduction contributions) required to have been made under any of the
Employee Benefit Plans or by law to any funds or trusts established thereunder
or in connection therewith have been made by the due date thereof (including any
valid extension), and all contributions for any period ending on or before the
Effective Time which are not yet due will have been paid or accrued on or prior
to the Effective Time.
(c) True, correct and complete copies of the following documents, with
respect to each of the Employee Benefit Plans and Pension Plans, have been
delivered or made available to the Purchaser by the Company: (i) all plans and
related trust documents, and amendments thereto; (ii) the most recent Forms
5500; (iii) the last Internal Revenue Service determination letter; (iv) summary
plan descriptions; (v) the most recent actuarial report relating to the Employee
Benefit Plans and the Pension Plans; and (vi) written descriptions of all
non-written agreements relating to the Employee Benefit Plans.
(d) There are no pending actions, claims or lawsuits which have been
asserted or instituted against the Employee Benefit Plans, the assets of any of
the trusts under such plans or the plan sponsor or the plan administrator, or
against any fiduciary of the Employee Benefit Plans with respect to the
operation of such plans (other than routine benefit claims), nor does the
Company have knowledge of facts which could form a valid basis for any such
claim or lawsuit.
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(e) The Employee Benefit Plans have been maintained, in all material
respects, in accordance with their terms and with all provisions of ERISA and
the Code (including rules and regulations thereunder) and other applicable
federal and state laws and regulations, and neither the Company, any Subsidiary
of the Company nor any "party in interest" or "disqualified Person" with respect
to the Employee Benefit Plans has engaged in a "prohibited transaction" within
the meaning of Section 406 of ERISA or 4975 of the Code. No fiduciary to any
Employee Benefit Plan has any current liability for breach of fiduciary duty or
any other failure to act or comply in connection with the administration or
investment of the assets of any Employee Benefit Plan.
(f) None of the Employee Benefit Plans provide retiree life or retiree
health benefits except as may be required under Section 4980B of the Code or
Section 601 of ERISA and at the expense of the participant or the participant's
beneficiary. The Company and the ERISA Affiliates have at all times complied
with the notice and health care continuation requirements of Section 4980B of
the Code and Sections 601 through 608 of ERISA.
(g) Except as disclosed on Schedule 4.9(g) of the Disclosure Schedule,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due to
any employee or director (current, former or retired) of the Company, (ii)
increase any benefits otherwise payable under any Employee Benefit Plan, (iii)
result in the acceleration of the time of payment or vesting of any benefits
under any Employee Benefit Plan or (iv) constitute a "change in control" or
similar event under any Employee Benefit Plan. Except as disclosed on Schedule
4.9(g) of the Disclosure Schedule, no payment under any Employee Benefit Plan
will fail to be deductible by reason of Section 280G of the Code.
(h) Except as disclosed on Schedule 4.9(h) of the Disclosure Schedule, no
stock or other security issued by the Company or any Affiliate of the Company
forms or has formed a material part of the assets of any Employee Benefit Plan.
(i) There has been no "mass layoff" or "plant closing" as defined by the
Worker Adjustment and Retraining Notification Act or any similar state or local
"plant closing" law with respect to the current or former employees of the
Company.
SECTION 4.10. Proxy Statement. The Proxy Statement, if any (or any amendment
thereof or supplement thereto), to be sent to the stockholders of the Company in
connection with the Special Meeting or the information statement, if any, to be
sent to such stockholders, as appropriate, will comply in all material respects
with the applicable requirements of the Exchange Act and the rules and
regulations thereunder. The Proxy Statement will not, at the time the Proxy
Statement is mailed to stockholders and at the time of the Special Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the meeting of the Company's
stockholders held for approval of the Merger which has become false or
misleading, except that no representation or warranty is being made by the
Company with respect to any information expressly concerning the Purchaser,
Mannesmann AG ("Mannesmann") or Olivetti S.p.A. ("Olivetti"), which has been
supplied by such entities or which the Purchaser has had a prior opportunity to
review.
SECTION 4.11. Brokers. Except as to Wasserstein Perella and Donaldson Lufkin
& Jenrette Securities Corporation ("DLJ"), no broker, finder or investment
banker or other financial advisor is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company. The
Company has heretofore furnished to the Purchaser true and complete information
concerning the financial arrangements between the Company and Wasserstein
Perella and DLJ pursuant to which such firms would be entitled to any payment as
a result of the transactions contemplated by this Agreement.
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SECTION 4.12. Conduct of Business; Licenses and Permits.
(a) Except as disclosed in the SEC Reports filed prior to the date hereof,
the business of the Company (which shall be deemed to exclude the operations of
Omnitel Sistemi Radiocellulari Italiani S.p.A. and Omnitel Pronto Italia S.p.A.
(collectively, "Omnitel")) is not being conducted in default or violation of
(with or without due notice or lapse of time or both) any term, condition or
provision of (i) its Restated Certificate of Incorporation or By-Laws, or (ii)
any note, bond, mortgage, indenture, contract, agreement, lease or other
instrument or agreement of any kind to which the Company is a party or by which
the Company or any of its properties or assets may be bound (each, a "Company
Agreement"), or (iii) any Federal, state, local or foreign statute, law,
ordinance, rule, regulation, judgment, decree, order, concession, grant,
franchise, permit or license or other governmental authorization or approval
applicable to the Company, and no notice, charge, claim, action or assertion has
been received by the Company or has been filed, commenced or, to the Company's
knowledge, threatened against the Company alleging any such violation except,
with respect to the foregoing clauses (ii) and (iii), defaults or violations
that would not, individually or in the aggregate, have a Material Adverse
Effect. To the Company's knowledge, no other party to any Company Agreement is
in default or violation in respect thereof, and no event has occurred which,
with due notice or lapse of time or both, would constitute such a default or
violation. The Company has delivered to the Purchaser or its representatives
true and complete originals or copies of all the Company Agreements.
(b) Schedule 4.12 of the Disclosure Schedule sets forth a true and complete
list of all licenses, permits, franchises, authorizations and approvals issued
or granted to the Company by any Governmental Authority (the "Licenses and
Permits"), and all pending applications therefor. Such list contains a summary
description of each such item and, where applicable, specifies the date issued,
granted or applied for, the expiration date and the current status thereof. Each
License and Permit has been duly obtained, is valid and in full force and
effect, and is not subject to any pending or, to the Company's knowledge,
threatened administrative or judicial proceeding to revoke, cancel, suspend or
declare such License and Permit invalid in any respect. To the Company's
knowledge, the Licenses and Permits are sufficient and adequate in all material
respects to permit the continued lawful conduct of the Company's business (which
shall be deemed to exclude the operations of Omnitel) in the manner now
conducted and as proposed to be conducted, and none of the operations of the
Company are being conducted in a manner that violates in any material respect
any of the terms or conditions under which any License and Permit was granted.
Except as disclosed on Schedule 4.12 of the Disclosure Schedule, no such License
and Permit will be affected by, or terminate or lapse by reason of, the
transactions contemplated by this Agreement.
SECTION 4.13. Compliance with Law. Except as disclosed on Schedule 4.8 (as
applicable) and Schedule 4.13 of the Disclosure Schedule, the operations of the
Company (which shall be deemed to exclude the operations of Omnitel) have been
conducted in accordance with all applicable laws, regulations, orders and other
requirements of all Governmental Authorities having jurisdiction over the
Company and its assets, properties and operations. Except as disclosed on
Schedule 4.8 (as applicable) and Schedule 4.13 of the Disclosure Schedule, the
Company has not received notice of any violation of any such law, regulation,
order or other legal requirement, and is not in default with respect to any
order, writ, judgment, award, injunction or decree of any Governmental
Authority. The Company has no knowledge of any proposed change in any such laws,
rules or regulations (other than laws of general applicability) that would
materially and adversely affect the transactions contemplated by this Agreement
or would have a Material Adverse Effect. To the Company's knowledge, neither the
Company nor any director, officer, agent, employee or other Person associated
with or acting on behalf of the Company has: used any funds for any unlawful
contribution, gift, entertainment or other unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.
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SECTION 4.14. Taxes. Except as disclosed on Schedule 4.14 of the Disclosure
Schedule:
(a) Except as would not, either individually or in the aggregate, have a
Material Adverse Effect: (i) the Company has timely filed with the appropriate
Tax Authority (as defined below) all Tax Returns (as defined below) required to
be filed by or with respect to the Company, and such Tax Returns are true,
correct and complete in all material respects; (ii) all Taxes (as defined below)
due and payable by the Company with respect to the taxable years or other
taxable periods ending on or prior to the Effective Time have been, or on or
prior to the Effective Time will be, paid or adequately disclosed and fully
provided for; (iii) no Audits (as defined below) are pending or, to the
Company's knowledge, threatened with regard to any Taxes or Tax Returns of the
Company, and there are no outstanding deficiencies or assessments asserted or
proposed; (iv) no issue has been raised by any Taxing Authority in any Audit of
the Company that if raised with respect to any other period not so audited could
be expected to result in a proposed deficiency of any period not so audited; (v)
there are no outstanding agreements, consents or waivers extending the statutory
period of limitations applicable to the assessment of any Taxes or deficiencies
against the Company, and the Company is not a party to any agreement providing
for the allocation or sharing of Taxes; (vi) no powers of attorney with respect
to Taxes of the Company have been executed that will be outstanding as of the
Effective Time; (vii) there are no Liens for Taxes upon any of the assets of the
Company, except for Liens for Taxes not yet due and payable for which adequate
reserves have been established on the Company's balance sheet at September 30,
1998 included in the Company's Quarterly Report on Form 10-Q filed with the SEC
prior to the date hereof (the "Balance Sheet") in accordance with GAAP and
(viii) the Company has complied in all respects with all applicable laws, rules
and regulations relating to the payment and withholding of Taxes (including,
without limitation, withholding of Taxes pursuant to Sections 1441 and 1442 of
the Code or similar provisions under any foreign laws) and has, within the time
and in the manner prescribed by law, withheld and paid over to the proper Tax
Authorities all amounts required to be so withheld and paid over under
applicable laws.
(b) The Company has not filed a consent to the application of Section 341(f)
of the Code.
(c) The Company is not and has not been a United States real property
holding company (as defined in Section 897(c)(2) of the Code) during the
applicable period specified in Section 897(c)(1)(ii) of the Code.
(d) No indebtedness of the Company is "corporate acquisition indebtedness"
within the meaning of Section 279(b) of the Code.
(e) The Company has not entered into any agreements that would result in the
disallowance of any tax deductions pursuant to Section 280G of the Code.
(f) Subject to the Purchaser's consent under Section 6.10 of this Agreement,
the Company has made or will by the Effective Time make, a valid "qualified
electing fund" election ("QEF Election"), pursuant to Section 1295 of the Code
with respect to all stock which it owns, or is considered to own, in any
corporation which meets the definition of "passive foreign investment company"
("PFIC") set forth in Section 1297 of the Code. Such QEF Election or elections
are, or will be, effective for all periods in which the Company is considered to
own the stock to which the election relates. Any PFIC is, or will be, a
qualified electing fund with respect to the Company for all taxable years that
the Company has held the PFIC stock.
(g) The Company has not made any change in accounting methods or received a
ruling from any taxing authority, other than with respect to a PFIC, likely to
have a material adverse effect on the Company.
(h) The deductibility of compensation paid by the Company will not be
limited by Section 162(m) of the Code.
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(i) All transactions that could give rise to an understatement of the
federal income tax liability of the Company within the meaning of Section
6662(d) of the Code are adequately disclosed on Tax Returns in accordance with
Section 6662(d)(2)(B) of the Code and the taxpayer reasonably believed that the
tax treatment of such item was more likely than not to be the proper treatment.
(j) No excess loss accounts or deferred intercompany gains as defined in the
consolidated return regulations promulgated under the Code exist with respect to
the Company.
(k) For purposes of this Agreement, "Taxes" means any Federal, state, local
and foreign taxes, and other assessments of a similar nature (whether imposed
directly or through withholding), including any interest, additions to tax, or
penalties applicable thereto, imposed by any Tax Authority; "Tax Authority"
means the Internal Revenue Service and any other domestic or foreign
Governmental Authority responsible for the administration of any Taxes; and
"Audit" means any audit, assessment or other examination relating to Taxes by
any Tax Authority or any judicial or administrative proceedings relating to
Taxes.
(l) For purposes of this Agreement, "Tax Return" means any return, report,
information return or other document (including any related or supporting
information and, where applicable, profit and loss accounts and balance sheets)
with respect to Taxes.
SECTION 4.15. Intellectual Property. Schedule 4.15 of the Disclosure
Schedule contains a true and complete list of all (i) patents and patent
applications, (ii) trademark and service mark registrations and applications,
(iii) Computer Software (as defined below), (iv) copyright registrations and
applications, (v) material unregistered trademarks, service marks and
copyrights, and (vi) Internet domain names used or held for use in connection
with the business of the Company, together with all licenses related to the
foregoing.
(a) For purposes of this Agreement, "Computer Software" means (i) any and
all computer programs and applications consisting of sets of statements and
instructions to be used directly or indirectly in computer software or firmware
whether in source code or object code form, (ii) databases and compilations,
including without limitation any and all data and collections of data, whether
machine readable or otherwise, (iii) all versions of the foregoing including,
without limitation, all screen displays and designs thereof, and all component
modules of source code or object code or natural language code therefor, and
whether recorded on papers, magnetic media or other electronic or non-electronic
device, (iv) all descriptions, flowcharts and other work product used to design,
plan, organize and develop any of the foregoing, (v) all documentation
including, without limitation, all technical and user manuals and training
materials relating to the foregoing, and all Internet domain names and content
contained on all World Wide Web sites of the Company or any Subsidiary;
provided, however, that "Computer Software" shall not include (x) "shrink-wrap"
or other similar off-the-shelf software generally available or (y) software
provided to, or used to provide services to the Company by NTL Incorporated
("NTL"), Corecomm Limited ("Corecomm") or Cellular Communications of Puerto
Rico, Inc. ("CCPR").
(b) Except as disclosed on Schedule 4.15 of the Disclosure Schedule, the
Company is the sole and exclusive owner of all patents, patent applications,
patent rights, copyrights, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights and all goodwill of the business
associated therewith, trade secrets, registrations for and applications for
registration of trademarks, service marks and copyrights, technology and
know-how, Computer Software other than off-the-shelf applications, and other
confidential or proprietary rights and information and all technical and user
manuals and documentation made or used in connection with any of the foregoing,
used or held for use anywhere in the world in connection with the business of
the Company (which shall be deemed to exclude the operations of Omnitel) as
currently conducted (collectively, the "Intellectual Property"), free and clear
of all Liens. The Liens disclosed on Schedule 4.15 of the Disclosure Schedule do
not materially detract from the value of the Intellectual Property subject
thereto and do not materially impair the operations of the Company.
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(c) Except disclosed on Schedule 4.15 of the Disclosure Schedule, all
grants, registrations and applications for Intellectual Property that are used
in the business of the Company as currently conducted (i) are valid, subsisting,
in proper form and enforceable, and have been duly maintained, including the
submission of all necessary filings and fees in accordance with the legal and
administrative requirements of the appropriate jurisdictions, and (ii) have not
lapsed, expired or been abandoned, and no application or registration therefor
is the subject of any legal or governmental proceeding before any governmental,
registration or other authority in any jurisdiction.
(d) The Company owns or has the valid right to use all of the material
Intellectual Property used by it or held for use by it in connection with its
business (which shall be deemed to exclude the operations of Omnitel). To the
Company's knowledge, there are no conflicts with or infringements of any
Intellectual Property by any third party. The business of the Company (which
shall be deemed to exclude the operations of Omnitel) as currently conducted
does not conflict with or infringe in any way on any proprietary right of any
third party. There is no claim, suit, action or proceeding pending or, to the
Company's knowledge, threatened against the Company (i) alleging any such
conflict or infringement with any third party's proprietary rights, or (ii)
challenging the ownership, use, validity or enforceability of the Intellectual
Property.
(e) The Computer Software used by the Company in the conduct of its business
(which shall be deemed to exclude the operations of Omnitel) was either: (i)
developed by employees of the Company within the scope of their employment; (ii)
developed on behalf of the Company by a third party, and all ownership rights
therein have been assigned or otherwise transferred to or vested in the Company,
pursuant to written agreements; or (iii) as disclosed on Schedule 4.15 of the
Disclosure Schedule, licensed or acquired from a third party pursuant to a
written license, assignment, or other contract which is in full force and effect
and of which the Company is not in material breach. Except as disclosed on
Schedule 4.15 of the Disclosure Schedule, (x) no third party has had access to
any of the source codes for any of the Computer Software described in clause (i)
or (ii) hereof and (y) no act has been done or omitted to be done by the Company
to impair or dedicate to the public or entitle any Governmental Authority to
hold abandoned any of such Computer Software.
(f) Except as disclosed on Schedule 4.15 of the Disclosure Schedule, all
consents, filings, and authorizations by or with Governmental Authorities or
third parties necessary with respect to the consummation of the transactions
contemplated by this Agreement as they may affect the Intellectual Property have
been obtained.
(g) The Company has not entered into any material consent, indemnification,
forbearance to sue, settlement agreement or cross-licensing arrangement with any
Person relating to the Intellectual Property or the intellectual property of any
third party other than as may be contained in the license agreements disclosed
on Schedule 4.15 of the Disclosure Schedule.
(h) Except as disclosed on Schedule 4.15 of the Disclosure Schedule, the
Company is not, nor will it be as a result of the execution and delivery of this
Agreement or the performance of its obligations under this Agreement, in breach
of any license, sublicense or other agreement relating to the Intellectual
Property.
(i) No former or present employees, officers or directors of the Company
hold any right, title or interest, directly or indirectly, in whole or in part,
in or to any Intellectual Property.
SECTION 4.16. Employment Matters. No employee of the Company has entered
into a Company Agreement and the employment of all employees of the Company may
be terminated at will. The Company has not experienced any strikes, collective
labor grievances, other collective bargaining disputes or claims of unfair labor
practices in the last five years. To the Company's knowledge, there is no
organizational effort presently being made or threatened by or on behalf of any
labor union with respect to employees of the Company.
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SECTION 4.17. Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock is the only vote of
the holders of any class or series of the Company's capital stock which may be
necessary to approve this Agreement and the transactions contemplated hereby,
including the Merger.
SECTION 4.18. Environmental Matters.
(a) Except as disclosed on Schedule 4.18(a) of the Disclosure Schedule: (i)
the Company is and has been in compliance with all applicable laws, statutes,
rules, regulations, common law, ordinances, decrees, orders, judgments, permits,
licenses, registration and other governmental authorizations or approvals or
other legal or regulatory requirements relating to pollution or the protection
of human health, natural resources or the environment ("Environmental Laws"),
and there are no outstanding allegations by any Person that the Company is not
or has not been in compliance with any Environmental Laws, and (ii) the Company
currently holds all permits, licenses, registrations and other governmental
authorizations or approvals (including without limitation exemptions, waivers,
and the like) and financial assurances required under any Environmental Laws for
the Company to operate its business.
(b) Except as disclosed on Schedule 4.18(b) of the Disclosure Schedule, (i)
there is no asbestos or asbestos-containing materials in or on any real
property, buildings, structures or components thereof currently owned, leased or
operated by the Company, and (ii) there are and have been no underground or
aboveground storage tanks (whether or not required to be registered under any
applicable law), dumps, landfills, lagoons, surface impoundments, sumps,
injection wells or other disposal or storage sites or locations in or on any
property currently owned, leased or operated by the Company.
(c) Except as disclosed on Schedule 4.18(c) of the Disclosure Schedule, (i)
the Company has not received (x) any communication from any Person stating or
alleging that the Company is or may be liable under any Environmental Law
(including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, and any foreign or state
analog thereto) with respect to any actual or alleged environmental
contamination, (y) any request for information under any Environmental Law from
any Governmental Authority or any other Person with respect to any actual or
alleged environmental contamination or (z) notice of any actual or alleged
violation of Environmental Law, (ii) none of the Company, any Governmental
Authority or any other Person is conducting or has conducted (or is proposing or
threatening to conduct) any environmental remediation or investigation which
could result in a material liability of the Company under any Environmental Law
or otherwise require disclosure in any SEC Report, and (iii) the Company is not
subject to any judicial or administrative proceeding alleging a violation or
liability under any Environmental Law.
(d) Except as disclosed on Schedule 4.18(d) of the Disclosure Schedule, to
the Company's knowledge, (i) no party to any Company Agreement and no other
Person whose ability, in whole or in part, may be attributable to or asserted
against the Company, has received any notice, claim, demand or request for
information from any Governmental Authority or any other Person with respect to
any actual or potential liability under any Environmental Law, and (ii) no event
has occurred with respect to the Company or such parties which, with due notice
or the lapse of time or both, would give rise to any liability to the Company
under any Environmental Law.
SECTION 4.19. Real Property. The Company occupies space in New York and
London pursuant to an agreement with NTL. As of the date hereof, the Company
does not own or lease, have an option to purchase or lease or have any interest
in any real property.
SECTION 4.20. Title and Condition of Properties. The Company owns good and
marketable title, free and clear of all Liens, to all of the personal property
and assets shown on the Balance Sheet or acquired after September 30, 1998,
except for (a) assets which have been disposed of to nonaffiliated third parties
since September 30, 1998 in the ordinary course of business, (b) Liens reflected
in the Balance Sheet, (c) Liens or imperfections of title which are not,
individually or in the aggregate, material in
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character, amount or extent and which do not materially detract from the value
or materially interfere with the present or presently contemplated use of the
assets subject thereto or affected thereby, and (d) Liens for current Taxes not
yet due and payable. All of the machinery, equipment and other tangible personal
property and assets owned or used by the Company are in good condition and
repair, except for ordinary wear and tear not caused by neglect, and are usable
in the ordinary course of business, except for any matter otherwise covered by
this sentence which does not have, individually or in the aggregate, a Material
Adverse Effect. The personal property and assets reflected on the Balance Sheet
or acquired after September 30, 1998, the rights under the Company Agreements
and the Intellectual Property owned or used by the Company under valid licenses,
collectively include all assets necessary to provide, produce, sell and license
the services and products currently provided, produced, sold and licensed by the
Company and to conduct the business of the Company as presently conducted or as
currently contemplated to be conducted.
SECTION 4.21. Contracts. Each Company Agreement is legally valid and binding
and in full force and effect, except where failure to be legally valid and
binding and in full force and effect would not have a Material Adverse Effect.
Schedule 4.21 of the Disclosure Schedule sets forth a true and complete list of
(i) all material Company Agreements entered into by the Company since December
31, 1997 and all amendments to any Company Agreements included as an exhibit to
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997 and (ii) all non-competition agreements imposing restrictions on the
ability of the Company to conduct business in any jurisdiction or territory.
SECTION 4.22. Potential Conflicts of Interest. Except as disclosed on
Schedule 4.22 of the Disclosure Schedule or in the SEC Reports filed prior to
the date hereof, since December 31, 1997, there have been no transactions,
agreements, arrangements or understandings between the Company and its
affiliates that would be required to be disclosed under Item 404 of Regulation
S-K under the Securities Act. Except as disclosed on Schedule 4.22 of the
Disclosure Schedule, no officer of the Company owns, directly or indirectly, any
interest in (excepting not more than 1% stock holdings for investment purposes
in securities of publicly held and traded companies) or is an officer, director,
employee or consultant of any Person which is a competitor, lessor, lessee,
customer or supplier of the Company; and no officer or director of the Company
(i) owns, directly or indirectly, in whole or in part, any Intellectual Property
which the Company is using or the use of which is necessary for the business of
the Company; (ii) has any claim, charge, action or cause of action against the
Company, except for claims for accrued vacation pay and accrued benefits under
the Employee Plans; (iii) has made, on behalf of the Company, any payment or
commitment to pay any commission, fee or other amount to, or to purchase or
obtain or otherwise contract to purchase or obtain any goods or services from,
any other Person of which any officer or director of the Company, or, to the
Company's knowledge, a relative of any of the foregoing, is a partner or
stockholder (except stock holdings solely for investment purposes in securities
of publicly held and traded companies); or (iv) owes any money to the Company.
SECTION 4.23. Insurance. The Company has policies of insurance and bonds of
the type and in amounts customarily carried by Persons conducting businesses or
owning assets similar to those of the Company. There is no material claim
pending under any of such policies or bonds as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds.
All premiums due and payable under all such policies and bonds have been paid by
the Company and the Company is otherwise in compliance in all material respects
with the terms of such policies and bonds. The Company has no knowledge of any
threatened termination of, or material premium increase with respect to, any of
such policies.
SECTION 4.24. Opinion of Financial Advisor. The Company has received an
opinion from Wasserstein Perella, financial advisor to the Company, to the
effect that the consideration to be received in the Offer and the Merger by the
holders of the Shares is fair to such holders from a financial point of view, a
copy of which opinion has been delivered to the Purchaser.
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SECTION 4.25. Investment Company. The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
SECTION 4.26. Full Disclosure. The Company has not knowingly failed to
disclose to the Purchaser any facts material to the Company's business, results
of operations, assets, liabilities, financial condition or prospects (in each
case excluding those relating to Omnitel). No representation or warranty by the
Company in this Agreement and no statement by the Company in any document
referred to herein (including the Schedules and Exhibits hereto), contains any
untrue statement of a material fact or omits to state any material fact
necessary, in order to make the statement made herein or therein, in light of
the circumstances under which they were made, not misleading.
ARTICLE V.
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1. Acquisition Proposals. The Company will notify the Purchaser
immediately, but in any event within 24 hours, if any proposals, inquiries or
expressions of interest are received by, any information is requested from, or
any negotiations or discussions are sought to be initiated or continued with the
Company or its representatives, in each case in connection with any Takeover
Proposal (as defined below) or the possibility or consideration of making a
Takeover Proposal ("Takeover Proposal Interest") indicating, in connection with
such notice, the name of the Person indicating such Takeover Proposal Interest
and the terms and conditions of any proposals or offers. The Company agrees that
it will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any Takeover Proposal Interest. The Company agrees that it will take the
necessary steps promptly to inform the Persons referred to in the first sentence
hereof of the obligations undertaken in this Section 5.1. The Company agrees
that it shall keep the Purchaser informed, on a current basis, of the status and
terms of any Takeover Proposal Interest. As used in this Agreement, "Takeover
Proposal" shall mean any tender or exchange offer involving the Company, any
proposal for a merger, consolidation or other business combination involving the
Company, any proposal or offer to acquire in any manner a significant equity
interest in, or a significant portion of the business or assets of, the Company
(other than immaterial or insubstantial assets or inventory in the ordinary
course of business or assets held for sale), any proposal or offer with respect
to any recapitalization or restructuring with respect to the Company or any
proposal or offer with respect to any other transaction similar to any of the
foregoing with respect to the Company other than pursuant to the transactions to
be effected pursuant to this Agreement.
SECTION 5.2. Conduct of Business by the Company Pending the Merger. The
Company covenants and agrees that, (i) except as expressly contemplated by this
Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as
disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in
writing by the Purchaser, after the date hereof, and prior to the time the
directors of the Purchaser have been elected to and shall constitute a majority
of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and
usual course and, to the extent consistent therewith, the Company shall use its
best reasonable efforts to preserve its business organization intact and
maintain its existing relations with customers, suppliers, employees, creditors
and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise
of stock options or other rights to purchase shares of Company Common Stock
pursuant to the Option Plans outstanding on the date hereof or upon exercise of
outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or
pledge or agree to sell, transfer or pledge any treasury stock of the Company
beneficially owned by it, (ii) amend its Restated Certificate of Incorporation
or Bylaws or similar organizational documents; or (iii) split, combine or
reclassify the outstanding Shares;
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(c) the Company shall not: (i) declare, set aside or pay any dividend or
other distribution payable in cash, stock or property with respect to its
capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional
shares of, or securities convertible into or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, any shares of
capital stock of any class of the Company, other than shares of Company Common
Stock reserved for issuance on the date hereof pursuant to the exercise of
Options or Warrants or conversion of Voting Debt outstanding on the date hereof;
(iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber
any assets other than in the ordinary and usual course of business and
consistent with past practice, or incur or modify any indebtedness or other
liability, other than in the ordinary and usual course of business and
consistent with past practice; or (iv) redeem, purchase or otherwise acquire
directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation
payable or to become payable by the Company to any of its executive officers;
(ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the
payment or vesting of the amounts payable or to become payable under, any
existing bonus, incentive compensation, deferred compensation, severance, profit
sharing, stock option, stock purchase, insurance, pension, retirement or other
employee benefit plan, agreement or arrangement; or (iii) enter into any
employment or severance agreement with or, except in accordance with the
existing written policies of the Company, grant any severance or termination pay
to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material
contracts or waive, release or assign any material rights or claims, except in
the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a
beneficiary or a loss payable payee to be cancelled or terminated without notice
to the Purchaser, except in the ordinary course of business and consistent with
past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except
in the ordinary course of business, incur or assume any short-term indebtedness
in amounts not consistent with past practice; (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person, except in the ordinary
course of business and consistent with past practice; (iii) other than ordinary
course expense advances, make any loans, advances or capital contributions to,
or investments in, any other Person; or (iv) enter into any material commitment
or transaction (including, but not limited to, any borrowing, capital
expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by
it unless required by GAAP; or (ii) other than related to a QEF Election, make
any material Tax election, change any material Tax election already made, adopt
any material Tax accounting method, change any material Tax accounting method
unless required by GAAP, enter into any closing agreement, settle any material
Tax claim or assessment or consent to any material Tax claim or assessment or
any waiver of the statute of limitations for any such material claim or
assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction of any such
claims, liabilities or obligations, in the ordinary course of business and
consistent with past practice, or claims, liabilities or obligations reflected
or reserved against in, or contemplated by, the consolidated financial
statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company (other than the Merger);
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(k) the Company shall not take, or agree to commit to take, any action that
would, or is reasonably likely to, result in any of the conditions to the Merger
set forth in Article VII not being satisfied, or would make many representation
or warranty of the Company contained herein inaccurate in any respect at, or as
of any time prior to, the Effective Time, or that would materially impair the
ability of the Company to consummate the Merger in accordance with the terms
hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise
modify the Rights Agreement prior to the consummation of the Offer unless
required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or
arrangement to do any of the foregoing, or to authorize, recommend, propose or
announce an intention to do any of the foregoing.
SECTION 5.3. No Solicitation; Board Recommendation.
(a) The Company will not, and will use its best efforts to ensure that its
officers, directors, employees, investment bankers, attorneys, accountants and
other agents do not, directly or indirectly: (i) initiate, solicit or encourage,
or take any action to facilitate (including by the furnishing of information)
the making of, any offer or proposal which constitutes or is reasonably likely
to lead to any Takeover Proposal, (ii) enter into any agreement with respect to
any Takeover Proposal, or (iii) in the event of an unsolicited Takeover Proposal
for the Company engage in negotiations or discussions with, or provide any
information or data to, any Person (other than the Purchaser, any of its
affiliates or representatives and except for information which has been
previously publicly disseminated by the Company) relating to any Takeover
Proposal; provided, however, that nothing contained in this Section 5.3 or any
other provision hereof shall prohibit the Company or the Board of Directors from
(i) taking and disclosing to the Company's stockholders a position with respect
to a tender or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act or (ii) making such disclosure to the
Company's stockholders as, in the good faith judgment of the Board of Directors
after receiving advice from outside counsel, the Company deems necessary to
comply with its fiduciary duties to the Company's stockholders under applicable
law.
(b) Notwithstanding the foregoing, prior to the acceptance of Shares
pursuant to the Offer, the Company may furnish information concerning its
business, properties or assets to any Person pursuant to appropriate
confidentiality agreements, and may negotiate and participate in discussions and
negotiations with such Person concerning a Takeover Proposal (provided that the
Company shall not agree to any exclusive right to negotiate with the Company) if
(x) such entity or group has on an unsolicited basis submitted a bona fide
written proposal to the Company relating to any such transaction that provides
for consideration which the Board of Directors determines in good faith, after
receiving advice from a nationally recognized investment banking firm, is more
favorable to the Company and its stockholders than the Offer and the Merger
(taking into account all relevant factors) and which is not conditioned upon
obtaining additional financing not fully committed at such time or, in the view
of a nationally recognized investment banking firm, is reasonably likely to be
obtained under then existing market conditions, and (y) in the opinion of the
Board of Directors, after receiving advice from outside legal counsel to the
Company, the failure to provide such information or access or to engage in such
discussions or negotiations would likely cause the Board of Directors to breach
its fiduciary duties to the Company's stockholders under applicable law (a
Takeover Proposal which satisfies clauses (x) and (y) being referred to herein
as a "Superior Proposal"). The Company shall promptly provide to the Purchaser
any nonpublic information regarding the Company provided to any other party
which was not previously provided to the Purchaser. If the Company, after
consultation with outside legal counsel, believes that a breach of its fiduciary
duties to the Company's stockholders would likely occur, the Board of Directors
may (subject to this and the following sentences) inform the Company's
stockholders that it no longer believes that the Offer and the Merger is
advisable and no longer recommends approval (a "Subsequent Determination"), but
only at a
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time that is after the fifth business day following the Purchaser's receipt of
written notice advising the Purchaser that the Board of Directors has received a
Superior Proposal specifying the material terms and conditions of such Superior
Proposal (and including a copy thereof with all accompanying documentation),
identifying the Person making such Superior Proposal and stating that it intends
to make a Subsequent Determination. Notwithstanding anything herein to the
contrary, prior to and including such fifth day the Company may make such public
disclosure that is in its view required under the Federal securities laws, as
evidenced by an opinion from outside counsel to the Company, a copy of which
shall be provided to Purchaser prior to such disclosure. After providing such
notice, the Company shall provide a reasonable opportunity to the Purchaser to
make such adjustments in the terms and conditions of this Agreement and/or of
the Option Agreement as would enable the Company to proceed with its
recommendation to its stockholders without a Subsequent Determination. At any
time after five business days following notification to the Purchaser of the
Company's intent to do so and if the Company has otherwise complied with the
terms of this Section 5.3(b), the Board of Directors may terminate this
Agreement pursuant to clause (ii) of Section 8.1(f) and enter into an agreement
with respect to a Superior Proposal; provided that the Company shall,
concurrently with entering into such agreement, pay or cause to be paid to the
Purchaser the Termination Fee (as defined in Section 8.2(b) hereof).
Notwithstanding any other provision of this Agreement, the Company shall submit
this Agreement to its stockholders, whether or not the Board of Directors makes
a Subsequent Determination.
(c) Except as set forth in Section 5.3(b), neither the Board of Directors
nor any committee thereof shall (i) withdraw or modify, or propose to withdraw
or modify, in a manner adverse to the Purchaser, the approval or recommendation
by the Board of Directors or any such committee of the Offer, this Agreement or
the Merger, (ii) approve or recommend, or propose to approve or recommend, any
Takeover Proposal or (iii) enter into any agreement with respect to any Takeover
Proposal.
ARTICLE VI.
ADDITIONAL AGREEMENTS
SECTION 6.1. Proxy Statement. If required by the Exchange Act, as promptly
as practicable after the consummation of the Offer, the Company shall prepare
and file with the SEC, and shall use all reasonable efforts to have cleared by
the SEC, and promptly thereafter shall mail to stockholders, the Proxy
Statement. Except as set forth in Section 5.3(b), the Proxy Statement shall
contain the recommendation of the Board of Directors in favor of the Merger.
SECTION 6.2. Meeting of Stockholders of the Company. At the Special
Meeting, if any, the Company shall use its best efforts to solicit from
stockholders of the Company proxies in favor of the Merger. The Purchaser agrees
that it shall vote, or cause to be voted, in favor of the Merger all Shares
directly or indirectly beneficially owned by it.
SECTION 6.3. Additional Agreements. Subject to the terms and conditions
herein provided, the Company and the Purchaser will each comply in all material
respects with all applicable laws and with all applicable rules and regulations
of any Governmental Authority to achieve the satisfaction of the Minimum
Condition and all conditions set forth in Annex I hereto and Article VII hereof,
and to consummate and make effective the Merger and the other transactions
contemplated hereby. Each of the parties hereto agrees to use all reasonable
efforts to obtain in a timely manner all necessary waivers, consents and
approvals and to effect all necessary registrations and filings, and to use all
reasonable efforts to take, or cause to be taken, all other actions and to do,
or cause to be done, all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of the Company and the Purchaser
shall use all reasonable efforts to take, or cause to be taken, all such
necessary actions.
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SECTION 6.4. Notification of Certain Matters. The Company shall give
prompt notice to the Purchaser and the Purchaser shall give prompt notice to the
Company, of (a) the occurrence, or nonoccurrence, of any event whose occurrence,
or nonoccurrence, would be likely to cause either (i) any representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Effective Time or (ii) any
condition set forth in Annex I hereto to be unsatisfied in any material respect
at any time from the date hereof to the date the Purchaser purchases Shares
pursuant to the Offer and (b) any material failure of the Company or the
Purchaser, as the case may be, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 6.4 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
SECTION 6.5. Access to Information.
(a) From the date hereof to the Effective Time, the Company shall, and shall
cause its officers, directors, employees, auditors and agents to, afford the
officers, employees and agents of the Purchaser reasonable access at all
reasonable times to its officers, employees, agents, properties, offices and
other facilities and to all books and records, and shall furnish the Purchaser
with all financial, operating and other data and information as the Purchaser,
through its officers, employees or agents, may reasonably request.
(b) Unless otherwise required by law and until the Appointment Date, the
Purchaser agrees that it shall, and shall cause its affiliates and each of their
respective officers, directors, employees, financial advisors and agents (the
"Purchaser Representatives"), to hold in strict confidence all data and
information obtained by them from the Company (unless such information is or
becomes publicly available without the fault of any of the Purchaser
Representatives or public disclosure of such information is required by law in
the opinion of counsel to the Purchaser) and shall ensure that the Purchaser
Representatives do not disclose such information to others without the prior
written consent of the Company. Notwithstanding anything herein to the contrary,
the terms of the Confidentiality Agreement, dated December 1, 1998 (the
"Confidentiality Agreement") executed by the stockholders of Purchaser shall
remain in full force and effect.
(c) In the event of the termination of this Agreement, the Purchaser shall,
and shall cause its affiliates to, return (without maintaining any electronic,
digital, magnetic or optical representation thereof) promptly every document
furnished to them by the Company or any of its representatives in connection
with the transactions contemplated hereby and any copies (without maintaining
any electronic, digital, magnetic or optical representation thereof) thereof
which may have been made, and shall cause the Purchaser Representatives to whom
such documents were furnished promptly to return such documents and any copies
thereof any of them may have made, other than documents filed with the SEC or
otherwise publicly available.
SECTION 6.6. Public Announcements. The Purchaser and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to the Offer or the Merger and shall not issue
any such press release or make any such public statement before such
consultation, except as may be required by law.
SECTION 6.7. Best Efforts; Cooperation. Upon the terms and subject to the
conditions hereof, each of the parties hereto agrees to use its reasonable best
efforts to take or cause to be taken all actions and to do or cause to be done
all things necessary, proper or advisable to consummate the transactions
contemplated by this Agreement and shall use its reasonable best efforts to
obtain all necessary waivers, consents and approvals, and to effect all
necessary filings under the Exchange Act and the HSR Act. The parties hereto
shall cooperate in responding to inquiries from, and making presentations to,
regulatory authorities.
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SECTION 6.8. Agreement to Defend and Indemnify.
(a) It is understood and agreed that the Company shall, to the fullest
extent permitted under Delaware Law and regardless of whether the Merger becomes
effective, indemnify, defend and hold harmless, and after the Effective Time,
the Purchaser and the Surviving Corporation shall jointly and severally, to the
fullest extent permitted under Delaware Law, indemnify, defend and hold harmless
the present and former officers, directors, employees and agents of the Company
("Indemnified Parties") against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
amounts paid in settlement in connection with any claim, action, suit,
proceeding or investigation, including without limitation liabilities arising
out of this transaction, under the Exchange Act in connection with the Offer or
the Merger, and in the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) the
Company or the Surviving Corporation shall pay the reasonable fees and expenses
of counsel selected by the Indemnified Parties, which counsel shall be
reasonably satisfactory to the Company or the Surviving Corporation, promptly as
statements therefor are received, and (ii) the Company and the Surviving
Corporation will cooperate in the defense of any such matter; provided, however,
that neither the Company nor the Surviving Corporation shall be liable for any
settlement effected without its prior written consent (which consent shall not
be unreasonably withheld); and further, provided, that neither the Company nor
the Surviving Corporation shall be obliged pursuant to this Section 6.8 to pay
the fees and disbursements of more than one counsel for all Indemnified Parties
in any single action except to the extent that, in the opinion of counsel for
the Indemnified Parties, two or more of such Indemnified Parties have
conflicting interests in the outcome of such action. For three years after the
Effective Time, the Surviving Corporation shall be required to maintain or
obtain officers' and directors' liability insurance covering the Indemnified
Parties who are currently covered by the Company's officers and directors
liability insurance policy with respect to matters existing or occurring at or
prior to the Effective Time on terms not less favorable than those in effect on
the date hereof in terms of coverage and amounts; provided, however, that if the
aggregate annual premiums for such insurance at any time during such period
shall exceed 150% of the per annum rate of premium currently paid by the Company
for such insurance on the date of this Agreement, which amount is disclosed on
Schedule 6.8 of the Disclosure Schedule, then the Purchaser shall cause the
Company (or the Surviving Corporation if after the Effective Time) to, and the
Company (or the Surviving Corporation if after the Effective Time) shall,
provide the maximum coverage that shall then be available at an annual premium
equal to 150% of such rate. This Section 6.8 shall survive the consummation of
the Merger. The Purchaser shall cause the Surviving Corporation to reimburse all
expenses, including reasonable attorney's fees and expenses, incurred by any
Person to enforce the obligations of the Purchaser and the Surviving Corporation
under this Section 6.8. Notwithstanding Section 9.7 hereof, this Section 6.8 is
intended to be for the benefit of and to grant third party rights to Indemnified
Parties whether or not parties to this Agreement, and each of the Indemnified
Parties shall be entitled to enforce the covenants contained herein.
(b) If the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
Person, then and in each such case, proper provision shall be made so that the
successors and assigns of the Surviving Corporation assume the obligations set
forth in this Section 6.8.
SECTION 6.9. Debt Offer.
(a) The Company shall, within 10 days of receiving any request by the
Purchaser to do so, commence an offer to purchase (accompanied by a related
solicitation of consents regarding covenant amendments) all of the Company's
outstanding 9 1/2% Senior Discount Notes due 2005 (the "Senior Notes") on such
customary terms and conditions as are acceptable to the Purchaser and reasonably
satisfactory to the Board of Directors (the "Debt Offer"). The Company shall
waive any of the conditions to the Debt Offer and make any other changes in the
terms and conditions of the Debt Offer as may be requested by the
27
<PAGE>
Purchaser and as are reasonably satisfactory to the Board of Directors, and the
Company shall not, without the Purchaser's prior written consent, waive any
material condition to the Debt Offer, make any changes to the terms and
conditions of the Debt Offer set forth in Schedule 6.9 hereto or make any other
material changes in the terms and conditions of the Debt Offer. The Company
covenants and agrees that, subject to the terms and conditions of this
Agreement, including but not limited to the conditions in the Debt Offer, it
will accept for payment and pay for the Senior Notes as soon as reasonably
practicable after such conditions to the Debt Offer are satisfied and it is
permitted to do so under applicable law, provided that the Company shall use
reasonable best efforts to coordinate the timing of any such purchase with the
Purchaser in order to obtain the greatest participation in the Debt Offer.
(b) Promptly following the date of this Agreement, the Company and the
Purchaser shall prepare an offer to purchase for the Senior Notes and forms of
the related letters of transmittal and summary advertisement, as well as all
other information and exhibits (collectively, the "Debt Documents"). All
mailings of the Debt Documents to the holders of the Senior Notes in connection
with the Debt Offer shall be subject to the prior review, comment and approval
of the Purchaser (which approval shall not be unreasonably withheld or delayed).
The Company will use its reasonable best efforts to cause the Debt Documents to
be mailed to the holders of the Senior Notes as promptly as practicable
following receipt of the request from the Purchaser under paragraph (a) above to
do so. The Company agrees promptly to correct any information in the Debt
Documents that shall be or have become false or misleading in any material
respect.
(c) The Purchaser shall provide to the Company all funds necessary to
consummate the Debt Offer on terms reasonably satisfactory to the Board of
Directors. No term or condition of such funding shall prevent or restrict the
consummation of the Merger.
(d) In the event that the Debt Offer is commenced but is terminated without
consummation, and such failure to consummate is not the result of the Company's
breach, the Purchaser will reimburse the Company for any and all expenses and
fees incurred by the Company in connection with the Debt Offer.
SECTION 6.10. Qualified Electing Fund Documentation. The Company has
prepared, or caused to be prepared, and has submitted for review to the
Purchaser on or prior to the date hereof, Internal Revenue Service Form 8621 and
such amended United States Federal income Tax Returns (and other documentation),
as required for the Company to make a retroactive "Qualified Electing Fund"
election, pursuant to Treasury Regulations Section 1.1295-3T(f), effective for
the Company's entire holding period, with respect to the Company's interest in
Omnitel. Such documentation shall be prepared in such manner as would fully
satisfy the requirements of Treasury Regulations Section 1.1295-3T(g) and the
private letter ruling received by the Company dated November 18, 1998. Such
documentation shall not be filed with the Internal Revenue Service without the
Purchaser's prior written consent, which consent shall not be unreasonably
withheld or delayed. The Purchaser will take all actions necessary to file such
Forms 862i and such amended Tax Returns, and shall cooperate with the Company in
connection therewith.
SECTION 6.11. Omnitel Agreement. Notwithstanding anything herein to the
contrary, (i) it shall not constitute a failure of any condition to the Merger
set forth in Article VII of this Agreement nor to the Offer set forth in Annex I
of this Agreement, which conditions are for the benefit of the Purchaser, if,
and (ii) the Purchaser agrees that it will not terminate or seek to terminate or
otherwise impair its performance of this Agreement in any manner as a result of,
in either case, any claim, action, suit, proceeding (including, without
limitation, arbitration proceeding) or other alternative dispute resolution
proceeding or investigation is commenced or threatened against the Company, the
Purchaser, Mannesmann, Olivetti or Oliman Holding B.V. arising out of, or
relating to, the Joint Venture Agreement, dated as of May 3, 1990, among Ing. C.
Olivetti & C., S.p.A., Bell Atlantic International, Inc., CCI Partnership, Inc.,
Shearson Lehman Hutton Eurocell Italy, Inc. and Swedish Telecomm International
AB, as amended November 24, 1993 and February 23, 1994, and in connection with
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, other than any of the foregoing brought by or
on behalf of the Company.
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<PAGE>
ARTICLE VII.
CONDITIONS OF MERGER
The respective obligations of each party to effect the Merger shall be
subject to the following conditions, provided that the obligation of each party
shall not be relieved by the failure of any such conditions if such failure of
any such conditions is the proximate result of any breach by such party of any
of its material obligations under this Agreement.
SECTION 7.1. Offer. The Purchaser shall have made, or caused to be made,
the Offer and shall have purchased, or caused to be purchased, the Shares
pursuant to the Offer; provided, however, that this condition shall be deemed to
have been satisfied with respect to the obligation of the Purchaser to effect
the Merger if the Purchaser fails to accept for payment or pay for Shares
pursuant to the Offer in violation of the terms of the Offer or of this
Agreement.
SECTION 7.2. Stockholder Approval. The Merger and this Agreement shall
have been approved and adopted by the requisite vote of the stockholders of the
Company, if required by Delaware Law.
SECTION 7.3. No Challenge. No statute, rule, regulation, judgment, writ,
decree, order or injunction shall have been promulgated, enacted, entered or
enforced, and no other action shall have been taken, by any government or
governmental, administrative or regulatory authority or by any court of
competent jurisdiction, that in any of the foregoing cases has the effect of
making illegal or directly or indirectly restraining, prohibiting or restricting
the consummation of the Merger.
ARTICLE VIII.
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and the
transactions contemplated herein may be abandoned at any time before the
Effective Time, whether before or after stockholder approval:
(a) By mutual written consent of the Boards of Directors of the Purchaser
and the Company; or
(b) By the Purchaser if the Offer shall have expired or been terminated
without any Shares being purchased thereunder by the Purchaser as a result of
the occurrence of any of the events set forth in ANNEX I; or
(c) By either the Purchaser or the Company if a court of competent
jurisdiction or governmental, regulatory or administrative agency or commission
shall have issued an order, decree or ruling or taken any other action (which
order, decree or ruling the parties hereto shall use their best efforts to
lift), in each case permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement; or
(d) By the Purchaser if, without any material breach by the Purchaser of its
obligations under this Agreement, the purchase of Shares pursuant to the Offer
shall not have occurred on or before May 15, 1999; or
(e) By the Company if, without any material breach by the Company of its
obligations under this Agreement, the purchase of Shares pursuant to the Offer
shall not have occurred on or before May 15, 1999; or
(f) By the Company (i) if there shall be a material breach of any of the
Purchaser's representations, warranties or covenants hereunder, which breach
cannot be or has not been cured within ten days of the receipt of written notice
thereof, or (ii) to allow the Company to enter into an agreement in accordance
with Section 5.3(b) with respect to a Superior Proposal which the Board of
Directors has determined is more favorable to the stockholders of the Company
than the transactions contemplated hereby; provided
29
<PAGE>
that it has complied with all provisions thereof, including the notice provision
therein, and that it makes simultaneous payment of the Termination Fee, plus any
amounts then due as a reimbursement of expenses; or
(g) By the Purchaser if, prior to the purchase of Shares pursuant to the
Offer the Company shall have breached any representation, warranty or covenant
or other agreement contained in this Agreement, which breach (i) would give rise
to the failure of a condition set forth in paragraph (e) or (f) of Annex I
hereto and (ii) cannot be or has not been cured within ten days of the receipt
of written notice thereof; or
(h) By the Purchaser, at any time prior to the purchase of the Shares
pursuant to the Offer, if (i) the Board of Directors shall withdraw, modify, or
change its recommendation or approval in respect of this Agreement or the Offer
in a manner adverse to the Purchaser, (ii) the Board of Directors shall have
recommended any proposal other than by the Purchaser in respect of a Takeover
Proposal, (iii) the Company shall have exercised a right with respect to a
Takeover Proposal referenced in Section 5.3(b) and shall, directly or through
its representatives, continue discussions with any third party concerning a
Takeover Proposal for more than ten business days after the date of receipt of
such Takeover Proposal, (iv) a Takeover Proposal that is publicly disclosed
shall have been commenced or communicated to the Company which contains a
proposal as to price (without regard to whether such proposal specifies a
specific price or a range of potential prices) and the Company shall not have
rejected such proposal within twenty (20) business days of its receipt or, if
sooner, the date its existence first becomes publicly disclosed, or (v) any
Person or group (as defined in Section 13(d)(3) of the Exchange Act) other than
the Purchaser or any of its Subsidiaries or affiliates shall have become the
beneficial owner of more than 15% of the outstanding Company Common Stock
(either on a primary or a fully diluted basis); PROVIDED, HOWEVER, that this
provision shall not apply to any Person that owns more than 15% of the
outstanding Shares on the date hereof; or
(i) by the Purchaser, if the Company or its representatives shall have
materially breached the provisions of Section 5.1 or Section 5.3 hereof.
SECTION 8.2. Effect of Termination.
(a) In the event of termination of this Agreement as provided in Section 8.1
hereof, written notice thereof shall forthwith be given to the other party
specifying the provision hereof pursuant to which such termination is made, and
this Agreement shall forthwith become null and void and there shall be no
liability on the part of the Purchaser or the Company, except (i) as set forth
in Sections 6.5 and 9.3 hereof and (ii) nothing herein shall relieve any party
from liability for any breach of this Agreement.
(b) If (i) the Purchaser shall have terminated this Agreement pursuant to
Section 8.1(h) or Section 8.1(i), (ii) the Purchaser shall have terminated this
Agreement pursuant to Section 8.1(g), following the date hereof but prior to
such termination there shall have been a Takeover Proposal Interest, and within
two years of any such termination the Company shall have entered into a
definitive agreement with respect to a Takeover Proposal or a Takeover Proposal
with respect to the Company shall have been consummated or (iii) the Company
shall have terminated this Agreement pursuant to Section 8.1(f)(ii), then in any
such case the Company shall pay simultaneously with such termination if pursuant
to Section 8.1(f)(ii) and promptly, but in no event later than two business days
after the date of such termination or event if pursuant to Section 8.1(h),
8.1(i) or 8.1(g), to the Purchaser a termination fee (the "Termination Fee") of
$43 million, which amount shall be payable by wire transfer to such account as
the Purchaser may designate in writing to the Company.
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<PAGE>
ARTICLE IX.
GENERAL PROVISIONS
SECTION 9.1. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement or
in any schedule, instrument or other document delivered pursuant to this
Agreement shall terminate at the Effective Time or the termination of this
Agreement pursuant to Section 8.1, as the case may be, except that the
agreements set forth in Article II and Section 6.8 shall survive the Effective
Time indefinitely and those set forth in Sections 6.5(b), 6.5(c), 8.2 and 9.3
shall survive termination indefinitely.
SECTION 9.2. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made (i) as of the date delivered or sent by facsimile if delivered
personally or by facsimile, (ii) on the first business day following dispatch by
an internationally recognized overnight courier service to a domestic addressee,
(iii) on the third business day following dispatch by an internationally
recognized overnight courier service to a international addressee and (iv) on
the tenth business day after deposit with a national mail service, if mailed by
registered or certified mail (postage prepaid, return receipt requested), in
each case to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice, except that notices of changes
of address shall be effective upon receipt):
(a) if to the Purchaser:
Mannesmann AG
Am Wallgraben 125
D-70565 Stuttgart
Germany
Attention: Dr. Kurt J. Kinzius
Facsimile: 49-711-990-2201
and
Olivetti S.p.A.
Via Lorenteggio 257
20152 Milan
Italy
Attention: Marco De Benedetti
Facsimile: 39-2-4836-6700
With a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6009
Attention: Neil Novikoff, Esq.
Facsimile: (212) 728-8111
(b) if to the Company:
Cellular Communications International, Inc.
110 East 59th Street
New York, New York 10022
Attention: Richard J. Lubasch, Esq.
Facsimile: (212) 906-8497
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<PAGE>
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Thomas H. Kennedy, Esq.
Facsimile: (212) 735-2000
SECTION 9.3. Expenses. Except as expressly set forth in Section 8.2(b),
all fees, costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such fees,
costs and expenses.
SECTION 9.4. Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" of a Person means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned Person. For avoidance of doubt, NTL,
CCPR and Corecomm shall not be considered affiliates of the Company;
(b) "control" (including the terms "controlled by" and "under common control
with") means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of stock, as trustee or executor, by contract or credit arrangement or
otherwise; and
(c) "Lien" means any mortgage, pledge, hypothecation, assignment for
security purposes, deposit arrangement, encumbrance, lien (statutory or other),
charge or other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including without limitation any conditional sale or other title retention
agreement and any financing lease having substantially the same economic effect
as any of the foregoing); provided, however, that liens for Taxes not yet due
and payable but for which adequate reserves have been established and other
statutory liens shall not be Liens for the purposes of this Agreement.
(d) "Person" means an individual, corporation, partnership, limited
liability company, association, trust or any unincorporated organization.
SECTION 9.5. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.6. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
not affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the maximum extent possible.
SECTION 9.7. Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Option Agreement and the Stockholders Agreement constitute the
entire agreement and supersede any and all other prior agreements and
undertakings, both written and oral, between the parties with respect to the
subject matter hereof and, except as otherwise expressly provided herein, this
Agreement is not intended to confer upon any other Person any rights or remedies
hereunder.
SECTION 9.8. Assignment. This Agreement shall not be assigned by operation
of law or otherwise, except that the Purchaser may assign all or any of its
rights hereunder to any affiliate of the Purchaser provided that no such
assignment shall relieve the Purchaser of its obligations hereunder.
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<PAGE>
SECTION 9.9. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed entirely within that State.
SECTION 9.10. Amendment. This Agreement may be amended by the parties
hereto by action taken by the Purchaser and by action taken by or on behalf of
the Board of Directors at any time before the Effective Time; provided, however,
that, after approval, if any, of the Merger by the stockholders of the Company,
no amendment may be made which would reduce the amount or change the type of
consideration into which each Share will be converted upon consummation of the
Merger. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
SECTION 9.11. Waiver. At any time before the Effective Time, either party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only as against such party and only if
set forth in an instrument in writing signed by such party.
SECTION 9.12. Counterparts. This Agreement may be executed in two or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which shall
constitute one and the same agreement.
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<PAGE>
IN WITNESS WHEREOF, the Purchaser and the Company have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
<TABLE>
<S> <C> <C>
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
By: /s/ WILLIAM B. GINSBERG
-----------------------------------------
Name: William B. Ginsberg
Title: Chairman of the Board of Directors,
President, Chief Executive Officer
KENSINGTON ACQUISITION SUB, INC.
By: /s/ MARCO DE BENEDETTI
-----------------------------------------
Name: Marco De Benedetti
Title: Co-President and Co-Secretary
By: /s/ DR. KURT KINZIUS
-----------------------------------------
Name: Dr. Kurt Kinzius
Title: Co-President and Co-Secretary
</TABLE>
34
<PAGE>
ANNEX I
Conditions to the Offer. Notwithstanding any other provision of the Offer,
the Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered Shares promptly after termination or withdrawal of the Offer),
pay for, and (subject to any such rules or regulations) may delay the acceptance
for payment of any tendered Shares and (except as provided in this Agreement)
amend or terminate the Offer as to any Shares not then paid for if (i) the
condition that there shall be validly tendered and not withdrawn prior to the
expiration of the Offer a number of Shares which represents at least a majority
of the total number of shares of Company Common Stock then outstanding on a
fully diluted basis (after giving effect to the conversion or exercise of all
outstanding options, warrants and other rights and securities exercisable or
convertible into shares of Company Common Stock) shall not have been satisfied
(the "Minimum Condition"); (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer;
or (iii) at any time after the date of this Agreement and before the time of
acceptance of payment for any such Shares (whether or not any Shares have
theretofore been accepted for payment or paid for pursuant to the Offer), any of
the following conditions exists:
(a) there shall be threatened or pending in effect an injunction or
other order, decree, judgment or ruling by a court of competent jurisdiction
or by a governmental, regulatory or administrative agency or commission of
competent jurisdiction or a statute, rule, regulation, executive order or
other action shall have been promulgated, enacted, taken or threatened by a
Governmental Authority or a governmental, regulatory or administrative
agency or commission of competent jurisdiction which in any such case (i)
restrains or prohibits the making or consummation of the Offer or the
consummation of the Merger, (ii) prohibits or restricts the ownership or
operation by the Purchaser (or any of its affiliates or subsidiaries) of any
portion of its or the Company's business or assets which is material to the
business of all such entities taken as a whole, or compels the Purchaser (or
any of its affiliates or subsidiaries) to dispose of or hold separate any
portion of its or the Company's business or assets which is material to the
business of all such entities taken as a whole, (iii) imposes material
limitations on the ability of the Purchaser effectively to acquire or to
hold or to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote the Shares purchased by the Purchaser
on all matters properly presented to the stockholders of the Company, (iv)
imposes any material limitations on the ability of the Purchaser or any of
its affiliates or subsidiaries effectively to control in any material
respect the business and operations of the Company; or
(b) this Agreement shall have been terminated by the Company or the
Purchaser in accordance with its terms; or
(c) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or the over-the-counter market for a period in excess of 24 hours
(excluding suspensions or limitations resulting solely from physical damage
or interference with such exchanges not related to market conditions), (ii)
a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States (whether or not mandatory), (iii) a
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States (with the
exception of any such occurrence involving Iraq), (iv) any limitation
(whether or not mandatory) by any United States Governmental Authority on
the extension of credit generally by banks, (v) a change in general
financial, bank or capital market conditions which materially and adversely
affects the ability of financial institutions in the United States to extend
credit or syndicate loans to investment grade securities or (vi) in the case
of any of the foregoing existing at the time of the execution of this
Agreement, a material acceleration or worsening thereof; or
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<PAGE>
(d) (i) the Board of Directors or any committee thereof shall have
withdrawn or modified in a manner adverse to the Purchaser its approval or
recommendation of the Offer, the Merger or this Agreement, or approved or
recommended any Takeover Proposal, or (ii) the Company shall have entered
into any agreement with respect to any Superior Proposal in accordance with
Section 5.3(b) of this Agreement; or
(e) the representations and warranties of the Company set forth in this
Agreement shall not be true and correct in all material respects, in each
case (i) as of the date referred to in any representation or warranty which
addresses matters as of a particular date, or (ii) as to all other
representations and warranties as of the date of this Agreement and as of
the scheduled expiration of the Offer; or
(f) the Company shall have failed to perform in all material respects
any obligation or to comply with any agreement or covenant to be performed
or complied with by it under this Agreement; or
(g) the Purchaser shall have failed to receive a certificate executed by
the President or a Vice President of the Company, dated as of the scheduled
expiration of the Offer, to the effect that the conditions set forth in
paragraphs (e) and (f) of this ANNEX I have not occurred; or
(h) there shall have occurred any change (or any development that,
insofar as reasonably can be foreseen, is reasonably likely to result in any
change) that constitutes a Material Adverse Effect; or
(i) any Person acquires beneficial ownership (as defined in Rule 13d-3
promulgated under the Exchange Act), of at least 15% of the outstanding
Company Common Stock.
The foregoing conditions (other than the Minimum Condition) are for the sole
benefit of the Purchaser and may be asserted by the Purchaser regardless of the
circumstances (including any action or inaction by the Purchaser) giving rise to
any such conditions and may be waived by the Purchaser in whole or in part at
any time and from time to time, in each case, in the exercise of the good faith
judgment of the Purchaser and subject to the terms of this Agreement. The
failure by the Purchaser at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
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<PAGE>
TABLE OF DEFINITIONS
<TABLE>
<S> <C>
Affiliate....................................................................... 9.4(a)
Agreement....................................................................... Recitals
Appointment Date................................................................ 5.2
Audit........................................................................... 4.14(o)
Balance Sheet................................................................... 4.14(f)
Board of Directors.............................................................. Recitals
Certificates.................................................................... 2.11(b)
CCPR............................................................................ 4.15(a)
Closing......................................................................... 2.3
Closing Date.................................................................... 2.3
Code............................................................................ 4.9(a)
Company......................................................................... Recitals
Company Agreement............................................................... 4.12(a)
Company Common Stock............................................................ Recitals
Company Preferred Stock......................................................... 4.2?
Computer Software............................................................... 4.15(a)
Confidentiality Agreement....................................................... 6.5(b)
Control......................................................................... 9.4(b)
Corecomm........................................................................ 4.15(a)
Debt Documents.................................................................. 6.9
Debt Offer...................................................................... 6.9
Delaware Law.................................................................... Recitals
Article
Disclosure Schedule............................................................. IV
Dissenting Shares............................................................... 2.10(a)
Distribution Date............................................................... 1.2(a)(ii)
Effective Time.................................................................. 2.2
Employee Benefit Plans.......................................................... 4.9(a)
Environmental Laws.............................................................. 4.18(a)
ERISA........................................................................... 4.9(a)
ERISA Affiliate................................................................. 4.9(a)
Exchange Act.................................................................... 1.1(a)
Exchange Agent.................................................................. 2.11(a)
Expiration Date................................................................. 1.1(b)
Financial Statements............................................................ 4.5(b)
GAAP............................................................................ 4.5(b)
Governmental Authority.......................................................... 3.3(b)
HSR Act......................................................................... 3.3(b)
Indemnified Parties............................................................. 6.8(a)
Independent Directors........................................................... 1.3(a)
Intellectual Property........................................................... 4.15(b)
Licenses and Permits............................................................ 4.12(b)
Lien............................................................................ 9.4(c)
Mannesmann...................................................................... 4.10
Material Adverse Effect......................................................... 4.1
Merger.......................................................................... Recitals
Merger Consideration............................................................ 2.9(a)
Minimum Condition............................................................... Annex 1
Multiemployer Plan.............................................................. 4.9(a)
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
NTL............................................................................. 4.15(a)
Offer........................................................................... Recitals
Offer Documents................................................................. 1.1(c)
Offer Price..................................................................... Recitals
Offer to Purchase............................................................... 1.1(c)
Olivetti........................................................................ 4.10
Omnitel......................................................................... 4.12
Option Agreement................................................................ Recitals
Option Plans.................................................................... 2.12(a)
Option Price.................................................................... 2.12(a)
Options......................................................................... 2.12(a)
Other Stock Plan................................................................ 2.12(b)
PBGC............................................................................ 4.9(e)
Pension Plans................................................................... 4.9(a)
Person.......................................................................... 9.4(d)
PFIC............................................................................ 4.14(g)
Proxy Statement................................................................. 2.7(a)(ii)
Purchaser....................................................................... Recitals
Purchaser Information........................................................... 3.7
Purchaser Representatives....................................................... 6.5(b)
QEF Election.................................................................... 4.14(g)
Rights.......................................................................... Recitals
Rights Agreement................................................................ Recitals
Schedule 14D-1.................................................................. 1.1(c)
Schedule 14D-9.................................................................. 1.2(b)
SEC............................................................................. 1.1(b)
SEC Reports..................................................................... 4.5(a)
Securities Act.................................................................. 4.5(a)
Senior Notes.................................................................... 6.9
Shares.......................................................................... Recitals
Special Meeting................................................................. 2.7(a)(i)
Stockholders Agreement.......................................................... Recitals
Subsequent Determination........................................................ 5.3(b)
Subsidiary...................................................................... 4.1
Superior Proposal............................................................... 5.3(b)
Surviving Corporation........................................................... 2.1
Takeover Proposal............................................................... 5.1
Takeover Proposal Interest...................................................... 5.1
Tax Authority................................................................... 4.14(o)
Tax Return...................................................................... 4.14(p)
Taxes........................................................................... 4.14(o)
Termination Fee................................................................. 8.2(b)
Treasury Regulations............................................................ 4.14(m)
Voting Debt..................................................................... 4.2
Warrants........................................................................ 4.2
Wasserstein Perella............................................................. 1.2(a)(iii)
</TABLE>
38
<PAGE>
EXHIBIT B
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of December 11, 1998, by
and among Cellular Communications International, Inc., a Delaware corporation
(the "Company"), Kensington Acquisition Sub, Inc., a Delaware corporation
("Purchaser"), and the persons listed on Schedule 1 hereto (the "Stockholders").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this Agreement, the
Company and Purchaser have entered into an Agreement and Plan of Merger, dated
as of the date hereof (as such agreement may hereafter be amended from time to
time, the "Merger Agreement"), pursuant to which, among other things, Purchaser
will make a tender offer (the "Offer") for all outstanding shares of common
stock, par value $.01 per share ("Shares"), of the Company at a price of $65.75
per Share (the "Offer Price"), net to the seller in cash, to be followed by a
merger of Purchaser with and into the Company, and each issued and outstanding
Share, except as set forth in the Merger Agreement, will be converted into the
right to receive the Offer Price;
WHEREAS, the Stockholders are the Beneficial Owners (as defined below) and
owners of record, and have the sole right to vote and dispose of, Shares as
indicated on Schedule 1 hereto (with respect to such Stockholder, together with
any other Shares acquired by such Stockholder after the date hereof and during
the term of the Agreement, collectively the "Owned Shares"); and
WHEREAS, as an inducement and a condition to its entering into the Merger
Agreement and incurring the obligations set forth therein, Purchaser has
required that the Stockholders enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
representations, warranties, covenants and agreements contained herein and in
the Merger Agreement, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Certain Definitions. Capitalized terms not defined herein have the
respective meanings ascribed to them in the Merger Agreement. In addition, for
purposes of this Agreement:
"Affiliate" means, with respect to any specified Person, any Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person specified.
"Beneficially Own", "Beneficial Owner" or "Beneficial Ownership" with
respect to any securities means having "beneficial ownership" of such securities
(as determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same holder,
securities Beneficially Owned by a Person shall include securities Beneficially
Owned by all Affiliates of such Person and all other Persons with whom such
Person would constitute a "group" within the meaning of Section 13(d) of the
Exchange Act and the rules promulgated thereunder.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or other
entity.
"Representative" means, with respect to any Person, as applicable, such
Person's officers, directors, employees, agents and representatives (including
any investment banker, financial advisor, agent, representative or expert
retained by or acting on behalf of such Person or its Subsidiaries).
"Transfer" means, with respect to a security, the sale, transfer, pledge,
hypothecation, encumbrance, assignment or disposition of such security or the
Beneficial Ownership thereof, the offer to make such a sale, transfer or other
disposition, and each option, agreement, arrangement or understanding, whether
or not in writing, to effect any of the foregoing. As a verb, "Transfer" shall
have a correlative meaning.
<PAGE>
2. Agreement to Tender; Voting of Owned Shares; Proxy. (a) If requested by
the Purchaser, the Company shall take all actions necessary to provide that,
prior to the Expiration Date, all Options granted to Stockholders under the
Option Plans are vested and exercisable. Each Stockholder hereby agrees, if
requested by the Purchaser, to exercise (on the Expiration Date but not earlier
than 5 p.m. on such date) all Options granted to such Stockholder under the
Option Plans, which exercise may be conditional upon the satisfaction of the
following: the receipt of a notice from the Purchaser that, as of 5 p.m. on
such day, it expects satisfaction of all conditions in the Offer; the delivery
of an irrevocable notice by the Purchaser to the Depositary of its acceptance
for payment of the tenders of the Shares pursuant to the Offer and a calculation
showing that such exercise and tender will, giving effect to all Shares tendered
as of 5 p.m. on such day, result in a tender of over 90% of the outstanding
Shares in the Offer. In connection with such exercise, the Purchaser will
indemnify the Stockholder against any and all costs, expenses and taxes incurred
by such Stockholder which would not be incurred by such Stockholder if the
Options were treated pursuant to Section 2.12(a) of the Merger Agreement. During
the period commencing on the date hereof and continuing until the earlier to
occur of (i) the Effective Time and (ii) the termination of the Merger Agreement
in accordance with its terms (such period being referred to as the "Voting
Period"), each Stockholder (x) hereby agrees to validly tender (or cause the
record owner of such Shares to validly tender) and sell (and not withdraw)
pursuant to the Offer not later than the tenth business day after commencement
of the Offer all of the Owned Shares; and (y) at any meeting (whether annual or
special, and whether or not an adjourned or postponed meeting) of the Company's
stockholders, however called, or in connection with any written consent of the
Company's stockholders, subject to the absence of a preliminary or permanent
injunction or other final order by any United States federal, state or foreign
court barring such action, shall vote (or cause to be voted) all of its Owned
Shares:
a. in favor of the Merger, the execution and delivery by the Company of
the Merger Agreement and the approval and adoption of the Merger and the
terms thereof and each of the other actions contemplated by the Merger
Agreement and this Agreement and any actions required in furtherance thereof
and hereof;
b. against any action or agreement that would (A) result in a breach of
any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or of such Stockholder
under this Agreement or (B) impede, interfere with, delay, postpone, or
adversely affect the Merger or the transactions contemplated thereby or
hereby; and
c. except as otherwise agreed to in writing in advance by Purchaser,
against the following actions (other than the Merger and the transactions
contemplated by the Merger Agreement and this Agreement): (A) any
extraordinary corporate transaction, such as a merger, consolidation or
other business combination, involving the Company or any of its
Subsidiaries; (B) any sale, lease or transfer of a material amount of the
assets or business of the Company or its Subsidiaries, or any
reorganization, restructuring, recapitalization, special dividend,
dissolution, liquidation or winding up of the Company or its Subsidiaries;
(C) any change in the present capitalization of the Company, including any
proposal to sell any equity interest in the Company or any of its
Subsidiaries or any amendment of the Restated Certificate of Incorporation
or Bylaws of the Company; (D) any change in the majority of the Board of
Directors; (E) any other change in the Company's corporate structure or
business; and (F) any other action which is intended or could reasonably be
expected to impede, interfere with, delay, postpone, discourage or affect
the Merger, the transactions contemplated by the Merger Agreement or this
Agreement or the contemplated economic benefits of any of the foregoing. No
Stockholder shall enter into any agreement, arrangement or understanding
with any Person the effect of which would be inconsistent with or violative
of the provisions and agreement contained in this Section 2(a).
(b) IRREVOCABLE PROXY. EACH STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS
PURCHASER, DR. KURT J. KINZIUS AND MARCO DE BENEDETTI, IN THEIR RESPECTIVE
CAPACITIES AS OFFICERS OF PURCHASER, AND ANY INDIVIDUAL WHO
2
<PAGE>
SHALL HEREAFTER SUCCEED TO ANY SUCH OFFICE OF THE PURCHASER, AND ANY OTHER
DESIGNEE OF PURCHASER, EACH OF THEM INDIVIDUALLY, SUCH STOCKHOLDER'S IRREVOCABLE
(UNTIL THE END OF THE VOTING PERIOD) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER
OF SUBSTITUTION) TO VOTE THE OWNED SHARES OF THE STOCKHOLDER AS INDICATED IN
SECTION 2(a) ABOVE. THE STOCKHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL
THE END OF THE VOTING PERIOD) AND COUPLED WITH AN INTEREST AND SHALL TAKE SUCH
FURTHER ACTIONS AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY THE STOCKHOLDER WITH RESPECT TO THE OWNED SHARES.
3. (a) Restrictions on Transfer, Other Proxies. No Stockholder shall,
until the expiration of the Voting Period, directly or indirectly: (i) Transfer
to any Person any or all Owned Shares; (ii) except as provided in Section 2(b),
grant any proxies or powers of attorney, deposit any Owned Shares into a voting
trust or enter into a voting agreement, understanding or arrangement with
respect to such Owned Shares; or (iii) take any action that would make any
representation or warranty of such Stockholder contained herein untrue or
incorrect or would result in a breach by such Stockholder of its obligations
under this Agreement or a breach by the Company of its obligations under the
Merger Agreement. Notwithstanding the foregoing, the Stockholder may transfer
Shares to (x) an Affiliate of the Stockholder, (y) any member of the immediate
family of the Stockholder or trusts for the benefit of family members of the
Stockholder or (z) any organizations qualifying under Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, in each case under clauses (x), (y)
and (z), that agrees to be bound by this Agreement.
(b) Notwithstanding anything herein to the contrary, the Stockholder may
exercise Options pursuant to a "cashless exercise" or similar provision, such
that the number of Shares actually received may be less than the number of
Shares set forth on Schedule 1.
(c) Each Stockholder hereby agrees, during the Voting Period, to place the
following legend on any and all certificates representing any Owned Shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER PURSUANT TO THAT CERTAIN STOCKHOLDERS AGREEMENT, DATED
AS OF DECEMBER 11, 1998, BY AND AMONG THE STOCKHOLDERS OF CELLULAR
COMMUNICATIONS INTERNATIONAL, INC. PARTY THERETO, CELLULAR COMMUNICATIONS
INTERNATIONAL, INC. AND KENSINGTON ACQUISITION SUB, INC. AND ANY TRANSFER OF
SUCH SHARES IN VIOLATION OF THE TERMS OF SUCH AGREEMENT SHALL BE NULL AND VOID
AND OF NO EFFECT WHATSOEVER.
4. No Solicitation. (a) Other than as required in his capacity as director
of the Company (or as an officer of the Company acting at the direction of the
Board of Directors of the Company) under applicable law and fiduciary duties, in
which case his actions shall be restricted solely by the terms of the Merger
Agreement, each Stockholder and its Affiliates shall not, and shall instruct
their respective officers, directors, employees, agents or other Representatives
not to,
(i) directly or indirectly solicit, initiate, or encourage (including by way
of furnishing nonpublic information or assistance), or take any other
action to facilitate, any inquiries or proposals from any Person that
constitute, or may reasonably be expected to lead to, a Takeover
Proposal,
(ii) enter into, maintain, or continue discussions or negotiations with any
party (other than Purchaser) in furtherance of such inquiries or to
obtain a Takeover Proposal, and shall use their best efforts to cause any
such party in possession of confidential information about the Company
that was furnished by or on behalf of the Stockholder to return or
destroy all such information in the possession of any such party (other
than the Company) or in the possession of any Representative of any such
party,
3
<PAGE>
(iii) agree to or endorse any Takeover Proposal, or
(iv) authorize or permit the Stockholder's or any of its Affiliates'
Representatives to take any such action.
(b) During the Voting Period, other than as required in his capacity as
director of the Company (or as an officer of the Company acting at the direction
of the Board of Directors of the Company) under applicable law and fiduciary
duties, in which case his actions shall be restricted solely by the terms of the
Merger Agreement, each Stockholder shall not, and shall cause its Affiliates not
to, directly or indirectly, make any public comment, statement or communication,
or take any action that would otherwise require any public disclosure by such
Stockholder, the Company, Purchaser or any other Person, concerning the Merger
and the other transactions contemplated by the Merger Agreement and this
Agreement except for any disclosure (i) concerning the status of the Stockholder
as a party to this Agreement, the terms hereof, and its Beneficial Ownership of
Shares required pursuant to Section 13(d) of the Exchange Act or (ii) required
in the Proxy Statement (as defined in the Merger Agreement).
5. Proprietary Information. Except as required by law, no Stockholder and
no Representative of any Stockholder shall, at any time, directly or indirectly,
make use of or divulge or otherwise disclose to any Person other than Purchaser,
any trade secret, confidential information or other proprietary information or
data (including any financial data, mailing lists, customer lists or employee
data or records) concerning the business or policies of the Company or its
Subsidiaries that such Stockholder or any of its Representatives may have
learned as a stockholder, employee, officer or director of the Company or any of
its Subsidiaries.
6. Representations and Warranties of the Stockholder. Each Stockholder
hereby severally represents, warrants and covenants to Purchaser as follows:
(a) Due Authorization, Etc. Such Stockholder has all necessary power and
authority to enter into and perform this Agreement and its obligations
hereunder, and no other proceedings or actions on the part of such Stockholder
are necessary to authorize the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby. Such
Stockholder currently has good, valid and marketable title to the Owned Shares,
free and clear of all security interests, liens, claims, charges, encumbrances,
equities and options of any nature whatsoever, and with no restriction on the
voting rights pertaining thereto. The Stockholder further warrants that there
are no outstanding options, warrants or rights to purchase or acquire, or
agreements relating to, any of the Owned Shares.
(b) Enforceability. This Agreement constitutes a valid and binding
agreement of such Stockholder, enforceable against such Stockholder in
accordance with its terms. Neither the execution and delivery of this Agreement
by such Stockholder nor the consummation by such Stockholder of the transactions
contemplated hereby shall conflict with or constitute a violation of or default
under any contract, commitment, agreement, arrangement or restriction of any
kind to which such Stockholder is a party or by which such Stockholder is bound.
(c) Voting Rights. Except as provided in Section 2(b) hereof, such
Stockholder has sole power to vote and to dispose of the Owned Shares, and sole
power to issue instructions with respect to the Owned Shares to the extent
appropriate in respect of the matters set forth in this Agreement, sole power to
demand appraisal rights and sole power to agree to all of the matters set forth
in this Agreement, in each case with respect to all of the Owned Shares, with no
limitations, qualifications, or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement.
(d) No Filings. Except for filings, authorizations, consents and approvals
as may be required under, and other applicable requirements of, the HSR Act and
the Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any state or federal governmental body or authority is necessary
for the execution of this Agreement by such Stockholder and the consummation by
such Stockholder of the transactions contemplated hereby and (ii) none of the
execution and delivery of this
4
<PAGE>
Agreement by such Stockholder, the consummation by such Stockholder of the
transactions contemplated hereby or compliance by such Stockholder with any of
the provisions hereof shall (A) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which such Stockholder is a party or by which such
Stockholder or any of its properties or assets (including the Owned Shares) may
be bound, or (B) violate any order, writ, injunction, decree, judgment, statute,
rule or regulation applicable to such Stockholder or any of its properties or
assets.
(e) Such Stockholder understands and acknowledges that Purchaser is entering
into the Merger Agreement, and is incurring the obligations set forth therein,
in reliance upon the Stockholder's execution and delivery of this Agreement.
7. Representations and Warranties of Purchaser. Purchaser hereby
represents, warrants and covenants to each Stockholder as follows:
(a) Due Authorization, Etc. Purchaser has all necessary corporate power
and authority to enter into and perform this Agreement and its obligations
hereunder, and no other proceedings or actions on the part of Purchaser are
necessary to authorize the execution, delivery or performance of this Agreement
or the consummation of the transactions contemplated hereby.
(b) Enforceability. This Agreement constitutes a valid and binding
agreement of Purchaser, enforceable against Purchaser in accordance with its
terms. Neither the execution and delivery of this Agreement by Purchaser nor the
consummation by Purchaser of the transactions contemplated hereby shall conflict
with or constitute a violation of or default under any contract, commitment,
agreement, arrangement or restriction of any kind to which Purchaser is a party
or by which Purchaser is bound.
(c) No Filings. Except for filings, authorizations, consents and approvals
as may be required under, and other applicable requirements of, the HSR Act and
the Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any state or federal public body or authority is necessary for the
execution of this Agreement by Purchaser and the consummation by Purchaser of
the transactions contemplated hereby and (ii) none of the execution and delivery
of this Agreement by Purchaser, the consummation by Purchaser of the
transactions contemplated hereby or compliance by Purchaser with any of the
provisions hereof shall (A) conflict with or result in any breach of the
organizational documents of Purchaser, or (B) result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a default
(or give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which Purchaser is a party or by which Purchaser or
any of its properties or assets may be bound, or violate any order, writ,
injunction, decree, judgment, statute, rule or regulation applicable to
Purchaser or any of its properties or assets.
8. Certain Covenants.
(a) No Sale. No Stockholder shall sell, transfer, assign, pledge,
hypothecate or otherwise dispose of or limit its right to vote in any manner any
of the Owned Shares which are the subject matter of this Agreement except
pursuant to the terms hereof.
(b) Further Assurances. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further lawful action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
5
<PAGE>
9. Enforcement. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of New York or in any New York State court located in the
Borough of Manhattan, this being in addition to any other remedy to which they
are entitled at law or in equity. In addition, each of the parties hereto (a)
consents to submit itself (without making such submission exclusive) to the
personal jurisdiction of any federal court located in the State of New York or
any New York State court in the event any dispute arises out of this Agreement
or any of the transactions contemplated by this Agreement and (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court.
10. Miscellaneous.
(a) Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned or delegated, in whole or in
part, by operation of law or otherwise, by any of the parties hereto without the
prior written consent of the other parties, except that Purchaser may assign its
rights and obligations, in whole or in part, to any of its Affiliates, but no
such assignment shall relieve Purchaser of its obligations hereunder if such
assignee does not perform such obligations. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and assigns.
(b) Amendments. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
(i) as of the date delivered or sent by facsimile if delivered personally or by
facsimile, (ii) on the first business day following dispatch by an
internationally recognized overnight courier service to a domestic addressee,
(iii) on the third business day following dispatch by an internationally
recognized overnight courier service to a international addressee and (iv) on
the tenth business day after deposit with a national mail service, if mailed by
registered or certified mail (postage prepaid, return receipt requested), in
each case to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice, except that notices of changes
of address shall be effective upon receipt):
(i) if to the Company, to:
Cellular Communications International, Inc.
110 East 59th Street
New York, New York 10022
Attn: Richard Lubasch, Esq.
Fax: (212) 906-8497
with a copy to:
Skadden, Arps, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: Thomas H. Kennedy, Esq.
Fax: (212) 735-2000
6
<PAGE>
(ii) if to Purchaser, to:
Mannesmann AG
Am Wallgraben 125
D-70565 Stuttgart
Germany
Attn: Dr. Kurt J. Kinzius
Fax: 49-711-990-2201
and
Olivetti S.p.A.
Via Lorenteggio 257
20152 Milan
Italy
Attn: Marco De Benedetti
Fax: 39-2-4836-6700
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
Attn: Neil Novikoff, Esq.
Fax: (212) 728-8111
(iii) if to a Stockholder, as set forth on Schedule 1 hereto.
(d) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, REGARDLESS OF THE LAWS THAT
MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
(f) Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
(g) Entire Agreement; No Third-Party Beneficiaries. This Agreement, the
Option Agreement and the Merger Agreement (together with the other documents and
instruments referred to in the Option Agreement, the Merger Agreement and the
exhibits and disclosure schedules thereto) (a) constitute the entire agreement
and supersede all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter of this Agreement, and
(b) are not intended to confer upon any person other than the parties hereto any
rights or remedies.
7
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto on the date first above written.
<TABLE>
<CAPTION>
KENSINGTON ACQUISITION SUB, INC.
<S> <C> <C>
By: /s/ MARCO DE BENEDETTI
----------------------------------------
Name: Marco De Benedetti
Title: Co-President and
Co-Secretary
By: /s/ DR. KURT KINZIUS
----------------------------------------
Name: Dr. Kurt Kinzius
Title: Co-President and
Co-Secretary
CELLULAR COMMUNICATIONS
INTERNATIONAL, INC.
By: /s/ WILLIAM B. GINSBERG
----------------------------------------
Name: William B. Ginsberg
Title: Chairman of the Board of
Directors, President,
Chief Executive Officer
/s/ WILLIAM B. GINSBERG
- -------------------------------------------
Name: William B. Ginsberg
/s/ RICHARD J. LUBASCH
- -------------------------------------------
Name: Richard J. Lubasch
/s/ STANTON N. WILLIAMS
- -------------------------------------------
Name: Stanton N. Williams
/s/ GREGG GORELICK
- -------------------------------------------
Name: Gregg Gorelick
/s/ DEL MINTZ
- -------------------------------------------
Name: Del Mintz
/s/ SIDNEY R. KNAFEL
- -------------------------------------------
Name: Sidney R. Knafel
/s/ ALAN J. PATRICOF
- -------------------------------------------
Name: Alan J. Patricof
/s/ WARREN POTASH
- -------------------------------------------
Name: Warren Potash
</TABLE>
8
<PAGE>
EXHIBIT C
OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of December 11, 1998 (this "Agreement"),
between Kensington Acquisition Sub, Inc., a Delaware corporation ("Purchaser"),
and Cellular Communications International, Inc., a Delaware corporation (the
"Company").
WHEREAS, Purchaser and the Company, concurrently with the execution and
delivery of this Agreement, have entered into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), providing for, among other
things, the merger of Purchaser with and into the Company (the "Merger"); and
WHEREAS, as a condition to the willingness of Purchaser to enter into the
Merger Agreement, Purchaser has required that the Company agree, and in order to
induce Purchaser to enter into the Merger Agreement the Company has agreed, to
grant Purchaser the Option (as defined below) upon the terms and subject to the
conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual promises,
representations, warranties, covenants and agreements contained herein and in
the Merger Agreement, the parties hereto, intending to be legally bound hereby,
agree as follows:
ARTICLE I
THE OPTION
SECTION 1.1 Grant of Option. The Company hereby grants to Purchaser an
irrevocable option (the "Option") to purchase up to 4,338,133 newly-issued
shares ("Shares") of the Common Stock, par value $.01 per share ("Company Common
Stock"), of the Company at a purchase price per share of $65.75 (the "Exercise
Price"), in the manner set forth in Sections 1.2 and 1.3 of this Agreement;
provided, however, that in no event shall the number of Shares for which the
Option is exercisable exceed 19.9% of the Company's issued and outstanding
shares of Company Common Stock. The number of Shares that may be received upon
the exercise of the Option and the Exercise Price are subject to adjustment as
herein set forth. This Agreement shall terminate, and the Option hereby granted
shall expire, on the earliest of (i) the Effective Time (as defined in the
Merger Agreement) and (ii) to the extent that no Option Notice (as defined
below) has theretofore been given by Purchaser, six (6) months after any
termination of the Merger Agreement pursuant to Section 8.1(b), (f)(ii), (g),
(h) or (i) thereof and at the time of termination of the Merger Agreement
pursuant to Section 8.1(a), (c), (d), (e) or (f)(i).
SECTION 1.2 Exercise Of Option. At any time or from time to time prior to
the termination of the Option granted hereunder in accordance with the terms of
this Agreement (other than such time as Purchaser is in material breach of its
obligations under the Merger Agreement), Purchaser (or its designee) may
exercise the Option, in whole or in part, if on or after the date hereof:
(a) any corporation, partnership, individual, trust, unincorporated
association, or other entity or "person" (as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),) other
than Purchaser or any of its "affiliates" (as defined in the Exchange Act)
(a "Third Party"), shall have:
(i) commenced or announced an intention to commence a tender offer or
exchange offer for any shares of Company Common Stock, the consummation
of which would result in "beneficial ownership" (as defined under the
Exchange Act) by such Third Party (together with all such Third Party's
affiliates and "associates" (as such term is defined in the Exchange
Act)) of 15% or more of the then outstanding voting equity of the Company
(either on a primary or a fully diluted basis); or
(ii) acquired beneficial ownership of shares of Company Common Stock
which, when aggregated with any shares of Company Common Stock already
owned by such Third Party, its affiliates and associates, would result in
the aggregate beneficial ownership by such Third Party,
<PAGE>
its affiliates and associates of 15% or more of the then outstanding
voting equity of the Company (either on a primary or a fully diluted
basis); provided, however, that "Third Party" for purposes of this clause
(ii) shall not include any corporation, partnership, person, other entity
or group which beneficially owns more than 15% of the outstanding voting
equity of the Company (either on a primary or a fully diluted basis) as
of the date hereof and that does not, after the date hereof, increase
such ownership percentage by more than an additional 1% of the
outstanding voting equity of the Company (either on a primary or a fully
diluted basis); or
(b) any of the events described in Section 8.1(g) (so long as following
the date hereof but prior to any termination there shall have been a
Takeover Proposal Interest (as defined in the Merger Agreement)), 8.1(h) or
8.1(i) of the Merger Agreement that would allow Purchaser to terminate the
Merger Agreement has occurred (but without the necessity of Purchaser having
terminated the Merger Agreement).
In the event that Purchaser wishes to exercise all or any part of the
Option, Purchaser shall give written notice (the "Option Notice," with the date
of the Option Notice being hereinafter called the "Notice Date") to the Company
specifying the number of Shares it will purchase and a place and date (not
earlier than three (3) nor later than twenty (20) business days from the Notice
Date) for closing such purchase (a "Closing"). Purchaser's obligation to
purchase Shares upon any exercise of the Option is subject (at its election) to
the conditions that (i) no preliminary or permanent injunction or other order
against the purchase, issuance or delivery of the Shares issued by any federal,
state or foreign court of competent jurisdiction shall be in effect (and no
action or proceeding shall have been commenced or threatened for purposes of
obtaining such an injunction or order), (ii) any applicable waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act") shall have expired and (iii) there shall have been no material breach of
the representations, warranties, covenants or agreements of the Company
contained in this Agreement or the Merger Agreement; provided, however, that any
failure by Purchaser to purchase Shares upon exercise of the Option at any
Closing as a result of the nonsatisfaction of any of such conditions shall not
affect or prejudice Purchaser's right to purchase such Shares upon the
subsequent satisfaction of such conditions. Upon request by Purchaser, the
Company will promptly take all action required to effect all necessary filings
by the Company under the HSR Act.
SECTION 1.3 Purchase of Shares. At any Closing, (i) the Company will deliver
to Purchaser the certificate or certificates representing the number of Shares
being purchased in proper form for transfer upon exercise of the Option in the
denominations designated by Purchaser in the Option Notice, and, if the Option
has been exercised in part, a new Option evidencing the rights of Purchaser to
purchase the balance of the Shares subject thereto, and (ii) Purchaser shall pay
the aggregate purchase price for the Shares to be purchased by delivery to the
Company of a certified or bank cashier's check payable in New York Clearing
House funds to the order of the Company in the amount of the Exercise Price
times the number of Shares to be purchased.
SECTION 1.4 Adjustments Upon Share Issuances, Changes in Capitalization,
etc. (a) In the event of any change in Company Common Stock or in the number of
outstanding shares of Company Common Stock by reason of a stock dividend,
split-up, recapitalization, combination, exchange of shares or similar
transaction or any other change in the corporate or capital structure of the
Company (including, without limitation, the declaration or payment of an
extraordinary dividend of cash, securities or other property), the type and
number of the Shares to be issued by the Company upon exercise of the Option
shall be adjusted appropriately, and proper provision shall be made in the
agreements governing such transaction, so that Purchaser shall receive upon
exercise of the Option the number and class of shares or other securities or
property that Purchaser would have received in respect to the Company Common
Stock if the Option had been exercised immediately prior to such event, or the
record date therefor, as applicable, and the holder of such Company Common Stock
had elected to the fullest extent it would have been permitted to elect, to
receive such securities, cash or other property.
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(b) In the event that the Company shall enter into an agreement (i) to
consolidate with or merge into any person, other than Purchaser or one of its
subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) to permit any person, other than Purchaser or one
of its subsidiaries, to merge into the Company and the Company shall be the
continuing or surviving corporation, but, in connection with such merger, the
then outstanding shares of Company Common Stock shall be changed into or
exchanged for stock or other securities of the Company or any other person or
cash or any other property, or then outstanding shares of Company Common Stock
shall after such merger represent less than 50% of the outstanding shares and
share equivalents of the surviving corporation or (iii) to sell or otherwise
transfer all or substantially all of its assets to any person, other than
Purchaser or one of its subsidiaries, then, and in each such case, proper
provision shall be made in the agreements governing such transaction so that
Purchaser shall receive upon exercise of the Option the number and class of
shares or other securities or property that Purchaser would have received in
respect of Company Common Stock if the Option had been exercised immediately
prior to such transaction, or the record date therefor, as applicable, and the
holder of such Company Common Stock had elected to the fullest extent it would
have been permitted to elect, to receive such securities, cash or other
property.
(c) The rights of Purchaser under this Section 1.4 shall be in addition to,
and shall in no way limit, its rights against the Company for any breach of the
Merger Agreement.
(d) The provisions of this Agreement shall apply with appropriate
adjustments to any securities for which the Option becomes exercisable pursuant
to this Section 1.4.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser as follows:
SECTION 2.1 Authority Relative to this Agreement. The Company is a
corporation duly organized and validly existing under the laws of the State of
Delaware. The Company has all necessary power and authority (corporate and
otherwise) to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of the Company, and no other corporate proceeding on the part
of the Company is necessary to authorize this Agreement or for the Company to
consummate such transactions. This Agreement has been duly and validly executed
and delivered by the Company.
SECTION 2.2 No Conflict; Required Filings and Consents. The execution and
delivery of this Agreement by the Company do not, and the performance of this
Agreement by the Company will not, (i) conflict with or violate the Restated
Certificate of Incorporation or Bylaws of the Company, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Company or by which the Company is bound or affected, (iii) result in any breach
of or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance of any kind on any of the Shares pursuant to, any agreement,
contract, indenture, notice or instrument to which the Company is a party or by
which the Company is bound or affected, or (iv) except for applicable
requirements, if any, of the HSR Act, the Exchange Act and the Securities Act of
1933, as amended (the "Securities Act"), require any filing by the Company with,
or any permit, authorization, consent or approval of, any governmental or
regulatory authority, domestic or foreign.
SECTION 2.3 Option Shares. The Company has taken all necessary corporate
action to authorize and reserve for issuance upon exercise of the Option a total
of 4,338,133 Shares, and the Shares, when issued and delivered by the Company to
Purchaser (or its designee) upon exercise of the Option will be
3
<PAGE>
duly authorized, validly issued, fully paid and nonassessable shares of Company
Common Stock, and will be free and clear of any security interests, liens,
claims, pledges, charges or encumbrances of any kind.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to the Company as follows:
SECTION 3.1 Authority Relative to this Agreement. Purchaser is a corporation
duly organized and validly existing under the laws of the State of Delaware.
Purchaser has all necessary power and authority (corporate and otherwise) to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation by Purchaser of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
Purchaser, and no other corporate proceeding on the part of Purchaser is
necessary to authorize this Agreement or for Purchaser to consummate such
transactions. This Agreement has been duly executed and delivered by Purchaser
and, assuming its due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms.
SECTION 3.2 No Conflict, Required Filing and Consents. The execution and
delivery of this Agreement by Purchaser do not, and the performance of this
Agreement by Purchaser will not, (i) conflict with or violate the organizational
documents of Purchaser, (ii) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Purchaser or by which Purchaser is bound
or affected, (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, contract, indenture, note or instrument to which Purchaser is a
party or by which it is bound or affected or (iv) except for applicable
requirements, if any, of the HSR Act, the Exchange Act and the Securities Act,
require any filing by Purchaser with, or any permit, authorization, consent or
approval of, any governmental or regulatory authority, domestic or foreign,
except in the case of each of the foregoing clauses (i) through (iv) for any
such conflicts, violations, breaches, defaults, failures to file or obtain the
consent or approval of, or other occurrences that would not cause or create a
material risk of non-performance or delayed performance by Purchaser of its
obligations under this Agreement.
SECTION 3.3 Investment Intent. The purchase of Shares pursuant to this
Agreement is for the account of Purchaser for the purpose of investment and not
with a view to or for sale in connection with any distribution thereof within
the meaning of the Securities Act and the rules and regulations promulgated
thereunder.
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.1 Registration Rights; Listing of Shares. (a) Upon the written
request of Purchaser, the Company agrees to effect up to two registrations under
the Securities Act and any applicable state securities laws covering any part or
all of the Option (provided that only Shares will be distributed to the public)
and any part or all of the Shares purchased under this Agreement, which
registration shall be continued in effect for 90 days, unless, in the written
opinion of counsel to the Company, addressed to Purchaser and reasonably
satisfactory in form and substance to counsel for Purchaser, such registration
is not required for the sale and distribution of such Shares in the manner
contemplated by Purchaser. The registration effected under this paragraph shall
be effected at the Company's expense except for any underwriting commissions. If
Shares are offered in a firm commitment underwriting, the Company will provide
reasonable and customary indemnification to the underwriters. In the event of
any demand for registration pursuant to this paragraph, the Company may delay
the filing of the registration statement for
4
<PAGE>
a period of up to 90 days if, in the good faith judgment of the Board of
Directors of the Company, such delay is necessary in order to avoid interference
with a planned material transaction involving the Company. In the event the
Company effects a registration of Company Common Stock for its own account or
for any other stockholder of the Company (other than on Form S-4 or Form S-8 or
any successor or similar form), it shall allow Purchaser to participate in such
registration; provided, however, that if the managing underwriters in such
offering advise the Company in writing that in their opinion the number of
shares of Company Common Stock requested to be included in such registration
exceeds the number which can be sold in such offering, the Company will include
the securities requested to be included therein pro rata among the holders
requesting to be included.
(b) The Company shall, at its expense, use its best efforts to cause the
Shares to be approved for listing on the Nasdaq National Market (the "NNM")
subject to notice of issuance, as promptly as practicable following the date of
this Agreement, and will provide prompt notice to the NNM of the issuance of
each Share pursuant to any exercise of the Option.
SECTION 4.2 Right to Sell Option. At any time that Purchaser is entitled to
exercise the Option pursuant to Section 1.2 hereof, Purchaser may elect, in its
sole discretion, to sell the Option to the Company in lieu of exercising the
Option. The Company shall be required to purchase the Option from Purchaser on
the third business day after the Purchaser gives the Company written notice of
such election for a cash price (payable by certified or official bank check in
same day funds to Purchaser or its designee) equal to the product of the number
of Shares then covered by the Option multiplied by the excess over the Exercise
Price of the greater of (x) the closing price of a share of Company Common Stock
on the NNM on the last trading day prior to the date of such notice and (y) the
highest price per share of Company Common Stock paid or proposed to be paid to
any holder thereof by any person in any Takeover Proposal (as defined in the
Merger Agreement). The Company shall give Purchaser prompt written notice of the
occurrence of any event set forth in Section 1.2 hereof and of any agreements or
proposals relating to such an event, but the failure to give any such notice
shall not limit Purchaser's right to require the Company to purchase the Option
pursuant to this Section 4.2.
SECTION 4.3 Limitation on Profit. (a) Notwithstanding any other provision of
this Agreement, in no event shall Purchaser's Total Profit (as defined below)
exceed $14 million and, if it otherwise would exceed such amount, Purchaser, at
its sole election, shall either (a) reduce the number of shares of Company
Common Stock subject to the Option, (b) deliver to the Company for cancellation
Shares previously purchased by Purchaser, (c) pay cash to the Company, or (d)
any combination thereof, so that Purchaser's actually realized Total Profit
shall not exceed $14 million after taking into account the foregoing actions.
(b) As used herein, the term "Total Profit" shall mean the aggregate amount
(before taxes) of the following: (i) (x) the net cash amounts received by
Purchaser pursuant to the sale of Shares (or any other securities into which
such Shares are converted or exchanged) to any unaffiliated party, less (y)
Purchaser's purchase price of such Shares, and (ii) any Notional Total Profit
(as defined below).
(c) As used herein, the term "Notional Total Profit" with respect to the
total number of Shares as to which Purchaser could propose to exercise the
Option shall be the Total Profit determined as of the date of such proposal
assuming that the Option were fully exercised on such date for such number of
Shares and assuming that such Shares, together with all other Shares held by
Purchaser and its affiliates as of such date, were sold for cash at the closing
market price for the Company Common Stock as of the close of business on the
preceding trading day (less customary brokerage commissions).
SECTION 4.4 Transfer of Shares; Restrictive Legend. Purchaser agrees not to
transfer or otherwise dispose of the Shares, or any interest therein, without
first providing to the Company an opinion of counsel for Purchaser, reasonably
satisfactory in form and substance to counsel for the Company, to the effect
that such transfer or disposition will not violate the Securities Act or any
applicable state law governing the
5
<PAGE>
offer and sale of securities, and the rules and regulations thereunder.
Purchaser further agrees to the placement on the certificate(s) representing the
Shares of the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE."
provided that upon provision to the Company of any opinion of counsel for
Purchaser, reasonably satisfactory in form and substance to counsel for the
Company, to the effect that such legend is no longer required under the
provisions of the Securities Act or applicable state securities laws, the
Company shall promptly cause new unlegended certificates representing such
Shares to be issued to Purchaser against surrender of such legended
certificates.
SECTION 4.5 Best Efforts. Subject to the terms and conditions of this
Agreement, Purchaser and the Company shall each use its best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
Each party shall promptly consult with the other and provide any necessary
information and material with respect to all filings made by such party with any
governmental or regulatory authority in connection with this Agreement or the
transactions contemplated hereby.
SECTION 4.6 Further Assurances. The Company shall perform such further acts
and execute such further documents and instruments as may reasonably be required
to vest in Purchaser the power to carry out the provisions of this Agreement. If
Purchaser shall exercise the Option, or any portion thereof, in accordance with
the terms of this Agreement, the Company shall, without additional
consideration, execute and deliver all such further documents and instruments
and take all such further action as Purchaser may reasonably request for the
purpose of effectively carrying out the transactions contemplated by this
Agreement.
SECTION 4.7 Survival. All of the representations, warranties and covenants
contained herein shall survive a Closing and shall be deemed to have been made
as of the date hereof and as of the date of each Closing.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Specific Performance. The parties hereto agree that if any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, irreparable damage would occur, no
adequate remedy at law would exist and damages would be difficult to determine,
and that the parties shall be entitled to specific performance of the terms
hereof, without any requirement for securing or posting any bond, in addition to
any other remedy at law or equity.
SECTION 5.2 Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
SECTION 5.3 Amendment; Assignment. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto and specifically
referencing this Agreement. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other party hereto, except that the rights and obligations of Purchaser
hereunder may, upon written notice to the Company prior to or promptly following
such action, be assigned by Purchaser to any of its corporate affiliates, but no
such transfer shall relieve Purchaser of its obligations hereunder if such
transferee does not perform such obligations.
6
<PAGE>
SECTION 5.4 Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provisions hereof or
thereof shall not affect the validity and enforceability of the other provisions
hereof. If any provision of this Agreement, or the application thereof, to any
person or entity or any circumstances is invalid or unenforceable, (i) a
suitable and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid and unenforceable provision and (ii) the remainder of this Agreement and
the application of such provision to other persons, entities or circumstances
shall not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
SECTION 5.5 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware without giving
effect to the provisions thereof relating to conflicts of law.
SECTION 5.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but each of which
together shall constitute one and the same document.
SECTION 5.7 Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made (i) as of the date delivered or sent by facsimile if delivered
personally or by facsimile, (ii) on the first business day following dispatch by
an internationally recognized overnight courier service to a domestic addressee,
(iii) on the third business day following dispatch by an internationally
recognized overnight courier service to a international addressee and (iv) on
the tenth business day after deposit with a national mail service, if mailed by
registered or certified mail (postage prepaid, return receipt requested), in
each case to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice, except that notices of changes
of address shall be effective upon receipt):
(a) if to the Company, to:
Cellular Communications International, Inc.
110 East 59th Street
New York, New York 10022
Attn: Richard Lubasch, Esq.
Fax: (212) 906-8497
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: Thomas H. Kennedy, Esq.
Fax: (212) 735-2000
(b) if to Purchaser, to:
Mannesmann AG
Am Wallgraben 125
D-70565 Stuttgart
Germany
Attn: Dr. Kurt J. Kinzius
Fax: 49-711-990-2201
and
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Olivetti S.p.A.
Via Lorenteggio 257
20152 Milan
Italy
Attn: Marco De Benedetti
Fax: 39-2-4836-6700
with a copy to:
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
Attn: Neil Novikoff, Esq.
Fax: (212) 728-8111
SECTION 5.8 Binding Effect. The terms of this Agreement shall inure to the
benefit of and be binding upon by the successors and assigns of the parties
hereto. Nothing expressed or referred to in this Agreement is intended or shall
be construed to give any person other than the parties to this Agreement, or
their respective successors or assigns, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
IN WITNESS WHEREOF, each of the Company and Purchaser have caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.
<TABLE>
<S> <C> <C>
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
By: /s/ WILLIAM B. GINSBERG
-----------------------------------------
Name: William B. Ginsberg
Title: Chairman of the Board of Directors,
President, Chief Executive Officer
KENSINGTON ACQUISITION SUB, INC.
By: /s/ MARCO DE BENEDETTI
-----------------------------------------
Name: Marco De Benedetti
Title: Co-President and Co-Secretary
By: /s/ DR. KURT KINZIUS
-----------------------------------------
Name: Dr. Kurt Kinzius
Title: Co-President and Co-Secretary
</TABLE>
8
<PAGE>
EXHIBIT D
TITLE 8. CORPORATIONS
CHAPTER 1. GENERAL CORPORATION LAW
SUBCHAPTER IX. MERGER OR CONSOLIDATION
8 DEL. C. SECTION262 (1998)
Section 262. Appraisal rights
(a) Any stockholder of a corporation of this State who holds shares of stock
on the date of the making of a demand pursuant to subsection (d) of this section
with respect to such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise complied with
subsection (d) of this section and who has neither voted in favor of the merger
or consolidation nor consented thereto in writing pursuant to Section228 of this
title shall be entitled to an appraisal by the Court of Chancery of the fair
value of the stockholder's shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
"stockholder" means a holder of record of stock in a stock corporation and also
a member of record of a nonstock corporation; the words "stock" and "share" mean
and include what is ordinarily meant by those words and also membership or
membership interest of a member of a nonstock corporation; and the words
"depository receipt" mean a receipt or other instrument issued by a depository
representing an interest in one or more shares, or fractions thereof, solely of
stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to Section251 (other than a merger effected pursuant to
Section251(g) of this title), Section252, Section254, Section257, Section258,
Section263 or Section264 of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock, or
depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no appraisal
rights shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require for its
approval the vote of the stockholders of the surviving corporation as
provided in subsection (f) of Section251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required by
the terms of an agreement of merger or consolidation pursuant to
SectionSection251, 252, 254, 257, 258, 263 and 264 of this title to accept
for such stock anything except:
a. Shares of stock of the corporation surviving or resulting from such
merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts in
respect thereof, which shares of stock (or depository receipts in respect
thereof) or depository receipts at the effective date of the merger or
consolidation will be either listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or held of
record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a. and b. of this paragraph; or
d. Any combination of the shares of stock, depository receipts and cash
in lieu of fractional shares or fractional depository receipts described in
the foregoing subparagraphs a., b. and c. of this paragraph.
<PAGE>
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under Section253 of this title is not owned by
the parent corporation immediately prior to the merger, appraisal rights
shall be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are available
pursuant to subsection (b) or (c) hereof that appraisal rights are available
for any or all of the shares of the constituent corporations, and shall
include in such notice a copy of this section. Each stockholder electing to
demand the appraisal of such stockholder's shares shall deliver to the
corporation, before the taking of the vote on the merger or consolidation, a
written demand for appraisal of such stockholder's shares. Such demand will
be sufficient if it reasonably informs the corporation of the identity of
the stockholder and that the stockholder intends thereby to demand the
appraisal of such stockholder's shares. A proxy or vote against the merger
or consolidation shall not constitute such a demand. A stockholder electing
to take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to Section228
or Section253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days thereafter,
shall notify each of the holders of any class or series of stock of such
constituent corporation who are entitled to appraisal rights of the approval
of the merger or consolidation and that appraisal rights are available for
any or all shares of such class or series of stock of such constituent
corporation, and shall include in such notice a copy of this section;
provided that, if the notice is given on or after the effective date of the
merger or consolidation, such notice shall be given by the surviving or
resulting corporation to all such holders of any class or series of stock of
a constituent corporation that are entitled to appraisal rights. Such notice
may, and, if given on or after the effective date of the merger or
consolidation, shall, also notify such stockholders of the effective date of
the merger or consolidation. Any stockholder entitled to appraisal rights
may, within 20 days after the date of mailing of such notice, demand in
writing from the surviving or resulting corporation the appraisal of such
holder's shares. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the stockholder and that the stockholder
intends thereby to demand the appraisal of such holder's shares. If such
notice did not notify stockholders of the effective date of the merger or
consolidation, either (i) each such constituent corporation shall send a
second notice before the effective date of the merger or consolidation
notifying each of the holders of any class or series of stock of such
constituent corporation that are entitled to appraisal rights of the
effective date of the merger or consolidation or (ii) the surviving or
resulting corporation shall send such a second notice to all such holders on
or within 10 days after such effective date; provided, however, that if such
second notice is sent more than 20 days following the sending of the first
notice, such second notice need only be sent to each stockholder who is
entitled to appraisal rights and who has demanded appraisal of such holder's
shares in accordance with this subsection. An affidavit of the secretary or
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assistant secretary or of the transfer agent of the corporation that is
required to give either notice that such notice has been given shall, in the
absence of fraud, be prima facie evidence of the facts stated therein. For
purposes of determining the stockholders entitled to receive either notice,
each constituent corporation may fix, in advance, a record date that shall
be not more than 10 days prior to the date the notice is given, provided,
that if the notice is given on or after the effective date of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the day
on which the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw such
stockholder's demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in Chancery
in which the petition was filed a duly verified list containing the names and
addresses of all stockholders who have demanded payment for their shares and
with whom agreements as to the value of their shares have not been reached by
the surviving or resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be accompanied by such a
duly verified list. The Register in Chancery, if so ordered by the Court, shall
give notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation and to
the stockholders shown on the list at the addresses therein stated. Such notice
shall also be given by 1 or more publications at least 1 week before the day of
the hearing, in a newspaper of general circulation published in the City of
Wilmington, Delaware or such publication as the Court deems advisable. The forms
of the notices by mail and by publication shall be approved by the Court, and
the costs thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the tendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the tendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion,
3
<PAGE>
permit discovery or other pretrial proceedings and may proceed to trial upon the
appraisal prior to the final determination of the stockholder entitled to an
appraisal. Any stockholder whose name appears on the list filed by the surviving
or resulting corporation pursuant to subsection (f) of this section and who has
submitted such stockholder's certificates of stock to the Register in Chancery,
if such is required, may participate fully in all proceedings until it is
finally determined that such stockholder is not entitled to appraisal rights
under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the effective date of the merger or consolidation); provided, however, that
if no petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholder's
demand for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation.
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<TABLE>
<S> <C>
EXHIBIT E
WASSERSTEIN PERELLA & CO., INC.
31 WEST 42 STREET
NEW YORK, NEW YORK 10019-6118
TELEPHONE 212-969-2700
[LOGO] FAX 212-969-7836
</TABLE>
December 11, 1998
Board of Directors
Cellular Communications International, Inc.
110 East 59th Street
New York, NY 10019
Gentlemen:
You have asked us to advise you with respect to the fairness, from a
financial point of view, to the holders of the common stock, par value $0.01 per
share (the "Shares"), of Cellular Communications International, Inc. (the "the
Company") of the consideration to be received by such holders (other than
Purchaser, such term as defined herein, and its affiliates) pursuant to the
terms of the Agreement and Plan of Merger, dated as of December 11, 1998 (the
"Merger Agreement"), among the Company and Kensington Acquisition Sub, Inc.
("Purchaser"), a Delaware corporation wholly-owned jointly by Mannesmann AG
("Mannesmann") and Olivetti S.p.A. ("Olivetti", and together with Mannesmann,
the "Guarantors"). The Merger Agreement provides for, among other things, a cash
tender offer by Purchaser to acquire all of the outstanding Shares at a price of
$65.75 per Share (the "Tender Offer"), and for a subsequent merger of Purchaser
with and into the Company pursuant to which each remaining outstanding Share not
purchased in the Tender Offer (other than any Shares held in the treasury of the
Company, any shares owned by Purchaser, its subsidiaries or affiliates, or
Shares held by a holder who has demanded and perfected his demand for appraisal
of his Shares in accordance with Delaware law) will be converted into the right
to receive $65.75 in cash (the "Merger" and, together with the Tender Offer, the
"Transaction"). The terms and conditions of the Transaction are set forth in
more detail in the Merger Agreement. Pursuant to a Guarantee, dated December 11,
1998 (the "Guarantee") among the Company, Mannesmann and Olivetti, the
Guarantors have guaranteed the certain obligations of the Purchaser pursuant to
the Merger Agreement.
In connection with rendering our opinion, we have reviewed the Merger
Agreement. We have also reviewed and analyzed certain publicly available
business and financial information relating to the Company for recent years and
interim periods to date, as well as certain internal financial and operating
information, including financial forecasts, analyses and projections prepared by
or on behalf of the Company and provided to us for purposes of our analysis, and
we have met with management of the Company to review and discuss such
information and, among other matters, the Company's business, operations,
assets, financial condition and future prospects.
We have reviewed and considered certain financial and stock market data
relating to the Company, and we have compared that data with similar data for
certain other companies, the securities of which are publicly traded, that we
believe may be relevant or comparable in certain respects to the Company or one
or more of its businesses or assets, and we have reviewed and considered terms
and conditions of certain recent acquisitions and business combination
transactions in the cellular telecommunications industry specifically, and in
other industries generally, that we believe to be relevant to our inquiry. We
have also performed such other financial studies, analyses, and investigations
and reviewed such other information, including certain terms and conditions of
the agreements relevant to the Company's investment in Omnitel-Sistemi
Radiocellulari Italiani S.p.A., as we considered appropriate for purposes of
this opinion.
In our review and analysis and in formulating our opinion, we have assumed
and relied upon the accuracy and completeness of all of the financial and other
information provided to or discussed with us or publicly available, and we have
not assumed any responsibility for independent verification of any of such
information. We have also assumed and relied upon the reasonableness and
accuracy of the financial projections, forecasts and analyses provided to us,
and we have assumed that such
<PAGE>
Board of Directors
December 11, 1998
Page 2
projections, forecasts and analyses were reasonably prepared in good faith and
on bases reflecting the best currently available judgments and estimates of the
Company's management. We express no opinion with respect to such projections,
forecasts and analyses or the assumptions upon which they are based. In
addition, we have not reviewed any of the books and records of the Company, or
assumed any responsibility for conducting a physical inspection of the
properties or facilities of the Company, or for making or obtaining an
independent valuation or appraisal of the assets or liabilities of the Company,
and no such independent valuation or appraisal was provided to us. We also have
assumed that the transactions described in the Merger Agreement will be
consummated without waiver or modification of any of the material terms or
conditions contained therein by any party thereto. Our opinion is necessarily
based on economic and market conditions and other circumstances as they exist
and can be evaluated by us as of the date hereof.
It should be noted that in the context of our current engagement by the
Company, we were not authorized to and did not solicit third party indications
of interest in acquiring all or any part of the Company, or investigate any
alternative transactions that may be available to the Company.
In the ordinary course of our business, we may actively trade the debt and
equity securities of the Company for our own account and for the accounts of
customers and, accordingly, may at any time hold a long or short position in
such securities.
We have acted as financial advisor to the Company in connection with the
Transaction and will receive a fee for our service, a significant portion of
which is contingent upon the consummation of the Transaction. We will also
receive a fee for rendering this opinion. In addition, we and our affiliates
have provided investment banking services to the Company from time to time and
have received customary compensation for such services. We acted as co-manager
of the Company's offerings of EURO 235 million (face value) of 9.5% Senior
Discount Notes due 2005 and $75 million of 6% Convertible Subordinated Notes due
2005.
Our opinion addresses only the fairness from a financial point of view to
the shareholders of the Company of the consideration to be received by such
shareholders pursuant to the Transaction, and we do not express any views on any
other terms of the Transaction. Specifically, our opinion does not address the
Company's underlying business decision to effect the transactions contemplated
by the Merger Agreement.
It is understood that this letter is for the benefit and use of the Board of
Directors of the Company in its consideration of the Transaction, and except for
inclusion in its entirety in any proxy statement required to be circulated to
shareholders of the Company relating to the Merger or tender offer
recommendation statement on Schedule 14D-9 from the Company to holders of Shares
relating to the Transaction, may not be quoted, referred to or reproduced at any
time or in any manner without our prior written consent. This opinion does not
constitute a recommendation to any shareholder with respect to whether such
holder should tender Shares pursuant to the Tender Offer or as to how such
holder should vote with respect to the Merger, and should not be relied upon by
any shareholder as such.
Based upon and subject to the foregoing, including the various assumptions
and limitations set forth herein, it is our opinion that as of the date hereof,
$65.75 per Share cash consideration to be received by the shareholders of the
Company (other than Purchaser and its affiliates) pursuant to the Tender Offer
and the Merger is fair to such shareholders form a financial point of view.
Very truly yours,
/s/ WASSERSTEIN PERELLA & CO., INC.
Wasserstein Perella & Co., Inc.
